WATERWAYS  AND 
INLAND  SEAPORTS 

t 


By 

¥  BRIG.  GEN.  T.  Q.  ASHBURN,  U.  S.  A. 

CHAIRMAN  AND  EXECUTIVE 
INLAND  WATERWAYS  CORPORATION 


WASHINGTON 

GOVERNMENT  PRINTING  OFFICE 
1925 


3?^  -  , 

/\  s  3  w 

j£ng  meo  riXk . 

INTRODUCTION 


The  interest  in  inland  and  coastwise  water  transportation  that  has 
developed  in  the  past  five  years,  during  which  time  the  Government 
has  been  operating  a  barge  line  upon  the  Mississippi  River,  the 
coastal  waters  of  Louisiana  and  Alabama,  and  the  Warrior  River, 
the  numerous  inquiries,  the  mass  of  inaccurate  and  misleading  state¬ 
ments  that  have  been  put  forth,  the  almost  peremptory  demands  of 
the  friends  of  inland  waterway  transportation  to  have  the  question 
discussed  fully  and  fairly,  and  their  designation  of  me  as  the  one  to 
make  such  a  statement  led  me  to  accept  the  invitation  of  the  Chicago 
News  to  prepare  the  following  series  of  articles.  The  effort  has  been 
to  present  the  case  fairly  and  to  emphasize  the  need  of  coordination 
and  cooperation  of  rail,  water,  and  highway  transportation. 

Whether  or  not  this  has  been  done,  the  reader  may  judge. 

The  following  editorials  from  the  Chicago  News  are  appended : 

WATERWAYS  IN  NATIONAL  PROGRESS 

Despite  the  earnest  pleas  of  two  Chief  Executives,  Congress  has  done  nothing 
in  the  last  seven  years  toward  the  promotion  of  mutually  beneficial  cooperation 
between  the  railroads  of  the  country  and  waterways  already  in  existence  or 
capable  of  development.  That  cooperation  is  bound  to  come  sometime,  despite 
present  short-sighted  policies,  and  equally  certain,  as  Secretary  Hoover  has 
said  emphatically,  is  the  construction  of  the  proposed  Lakes  to  Gulf  water¬ 
way  and  the  St.  Lawrence  seaway. 

Waterway  development,  not  in  wasteful  opposition  to  the  railroads,  but  in 
intelligent  and  helpful  conjunction  with  them,  presents  a  question  as  vital  and 
pressing  as  any  the  people  of  the  United  States,  who  complain  of  high  freight 
rates  and  insufficient  markets,  are  called  upon  to  settle.  In  dealing  with  it 
science  and  experience,  not  prejudice  or  fixed  ideas,  should  be  consulted  and 
followed. 

Unfortunately  there  is  little  knowledge  among  lawmakers  of  the  potentiali¬ 
ties  of  waterway  development.  Too  often  the  inveterate  opponents  of  water¬ 
ways  make  sweeping  statements  against  the  most  rational  river  and  canal  im¬ 
provement  projects.  Their  bold  assertions,  made  with  an  air  of  absolute  con¬ 
fidence,  not  infrequently  mislead  the  public. 

The  greatest  need  in  the  discussion  of  the  waterway  problem  is  for  facts. 
Realizing  that,  The  Daily  News  has  asked  Brig.  Gen.  T.  Q.  Ashburn,  chairman 
of  the  Inland  Waterways  Corporation  of  the  United  States,  for  a  series  of 
articles  on  waterways  generally  and  barge  traffic  in  particular.  The  first  cf 
these  articles  was  published  yesterday.  Others  will  follow. 

General  Ashburn  is  regarded  in  business  circles  as  the  best  informed  man 
in  the  country  on  inland  water-borne  commerce,  and  Congress  has  almost  in- 
varibly  approved  his  recommendations  concerning  river  and  harbor  improve¬ 
ments  and  canalization  enterprises  He  does  not  indulge  in  vague  generalities; 
he  illustrates  his  propositions  in  a  concrete  and  convincing  manner.  His 
articles  are  both  attractive  and  informative. 


LESSONS  OF  THE  MISSISSIPPI  BARGE  LINE 

In  the  series  of  improving  articles  on  waterways  and  inland  seaports  which 
Brigadier  General  Ashburn  is  contributing  to  The  Daily  News,  general  proposi¬ 
tions  concerning  water  transportation  in  conjunction  with  land  carriers  are 

(in) 

l0  56228 

\ 

\ 


rv 


illustrated  by  concrete  facts  and  figures  supplied  by  the  Mississippi  barge  line, 
which  is  operated  by  a  governmental  agency  under  the  direction  of  the  War 
Department.  The  articles  have  answered  many  questions  frequently  asked 
by  shippers  and  by  students  of  transportation,  and  have  met  various  objec¬ 
tions  to  waterway  development  advanced  by  short-sighted  railroad  executives. 

General  Ashburn  is  satisfied  that  the  barge  line  can  establish  itself  on  a  pay¬ 
ing  basis  and  be  turned  over  eventually  to  a  private  corporation  on  terms  fair 
to  the  Government  and  the  taxpayers.  He  has  no  doubt  that  a  permanent  6 
per  cent  return  on  the  total  postwar  investment  by  the  Government  will  be 
possible.  He  points  out  that,  in  addition  to  this  benefit,  the  barge  line  will 
have  demonstrated  the  feasibility  and  economy  of  water  transportation  under 
efficient  management. 

The  barge  line  has  had  to  overcome  many  difficulties,  and  to  appeal  to  the 
Interstate  Commerce  Commission  for  rulings  in  its  controversies  with  railroads 
over  joint  rates.  Some  carriers  have  cooperated  with  it  on  fair  terms,  while 
others  have  been  reluctant  to  do  so.  Little  by  little,  however,  obstacles  have 
been  removed,  and  the  barge  line,  with  its  present  facilities,  can  carry  1,000,000 
tons  of  freight  a  year  at  a  saving  of  about  $1,350,000  to  the  shippers  and  the 
public.  If  the  fleet  were  properly  balanced,  the  tonnage  could  be  doubled. 
So  could  the  saving. 

The  barge  line  deals  with  scores  of  railroads,  and  asks  nothing  of  them  but  a 
fair  deal  in  the  fixing  of  their  shares  of  the  joint  rates.  It  is  not  taking 
freight  away  from  the  railroads  to  their  detriment ;  it  is  bringing  them  new 
business  by  promoting  industry  and  commerce,  and  by  lowering  transporta¬ 
tion  charges.  It  is  furnishing  an  object  lesson  to  Congress,  to  the  States  inter¬ 
ested  in  waterway  projects,  and  to  intelligent,  forward-looking  corporations 
seeking  opportunities  for  investment. 

On  the  other  hand,  the  Traffic  World,  in  a  biting  editorial,  accuses 
me  of  bad  logic  and  loose  statements,  and  such  well  might  be  said  if 
the  statements  to  which  exceptions  were  made — the  logic  that  was 
attacked— had  been  mine. 

As  a  matter  of  fact,  the  sole  portion  of  these  articles  attacked  was 
an  excerpt  from  a  speech  delivered  by  the  Hon.  Benjamin  G.  Hum¬ 
phreys  in  January,  1921,  on  the  floor  of  Congress,  under  decidedly 
different  conditions  from  the  present.  It  was  inserted  to  illustrate 
the  conditions  which  existed  at  that  time  and  the  line  of  argument 
of  the  proponents  of  waterways  as  to  why  such  conditions  did  exist 
and  should  be  changed. 

In  a  letter  to  the  editor  of  the  Traffic  World  I  stated  that  if  his 
concluding  paragraph  had  been  modified  by  the  substitution  of  the 
word  “  transportation  ”  for  “  inland  waterways  ”  he  had  so  suc¬ 
cinctly  stated  the  viewpoint  of  the  writer  as  to  be  susceptible  to  the 
charge  of  plagiarism.  His  concluding  paragraph  was  as  follows : 

We  have  no  quarrel  with  advocates  of  inland  waterway  [substitute  the  word 
“  transportation  ”]  expansion,  as  long  as  they  stay  within  the  facts  and  do 
not  use  distorted  logic.  Indeed,  there  are  many  things  to  be  said  in  favor  of  a 
reasonable  policy  of  inland  waterway  development.  But  we  insist  that  advo¬ 
cates  of  waterways  consider  the  transportation  problem  as  a  whole  and  not 
from  the  narrow  point  of  view  of  the  advocate  of  this,  that,  or  the  other 
project,  regardless  of  its  bearing  on  the  whole  situation.  One  can  not  consider 
the  problem  as  a  whole  without  keeping  in  mind  that  the  railroads  will  always 
have  to  be  depended  on  to  carry  the  bulk  of  the  traffic  in  this  country,  and,  in 
order  to  enable  them  to  do  this  to  the  satisfaction  of  industry,  they  must  be 
allowed  to  make  some  money  out  of  their  business.  Waterways  are  all  right 
as  a  supplemental  transportation  agency  if  they  can  be  developed  and  used 
on  a  reasonable  commercial  basis.  But  when  one  talks  of  their  value  as  a 
means  of  depressing  rail  rates,  he  shows  that  he  has  no  comprehension  of  the 
greater  transportation  problem,  and  either  no  realization  of  the  function  of 
the  Interstate  Commerce  Commission  or  no  confidence  in  that  body. 


V 


The  collection  of  these  articles  and  their  printing  in  pamphlet 
form  for  easy  and  continuous  reading  follows  the  declared  policy  of 
Congress  in  section  500,  transportation  act,  to  wit : 

It  is  hereby  declared  to  be  the  policy  of  Congress  to  promote,  encourage,  and 
develop  water  transportation,  service,  and  facilities  in  connection  with  the 
commerce  of  the  United  States  and  to  foster  and  preserve  in  full  vigor  both 
rail  and  water  transportation. 

T.  Q.  A. 


'a  ■  hi)  •  Ti  <  •  ;.j  . 


r'q:  :>  .j  I,ij4ir.  vj’n  •» 


♦  k. » i  *  j .  \  •*  * 

.ttf-i jck v>q5s  .  •'  ijiii.  •; 


: 


* 

. 


. 


' 


. 


' 


WATERWAYS  AND  INLAND  SEAPORTS 


I 

NOAH  ORIGINAL  WATERWAY  MAN 

The* original,  ardent,  dyed-in-the-wool  advocate  of  water  trans¬ 
portation  was  Noah;  the  prototype  of  the  modern  barge  was  the 
ark,  and  the  first  satisfactory  terminal  was  Mount  Ararat. 

Noah  was  a  common  carrier;  he  advertised  that  he  would  sail  at  a 
certain  date  and  carry  certain  commodities,  and  he  did.  Like  his 
descendants  who  advocate  the  full  utilization  of  water  as  a  means  of 
transport  as  a  necessity,  he  was  sneered  at,  opposed,  and  accused  of 
being  a  one-ideaed  man ;  in  other  words,  a  nut. 

From  the  time  he  laid  the  keel  of  the  ark  till  the  time  when  the 
floodgates  of  heaven  were  opened  and  the  rains  descended  and  the 
floods  came  he  was  surrounded  by  wise  men  who  counseled  him : 
44  See  here,  Noah,  old  top,  you’re  never  going  to  need  this  thing,  even 
if  it  does  float  on  the  water  (and  we  don’t  think  it  will),  how  are 
you  going  to  steer  it,  and  where  are  you  going?  Haven’t  we  got  our 
legs  and  our  beasts  of  burden  as  means  of  transportation?  What 
was  good  enough  for  our  fathers  is  good  enough  for  us.  Stop 
spending  your  good  simoleons  and  wasting  your  time  over  something 
which,  at  the  best,  is  only  an  experiment  and  will  never  be  needed  any¬ 
how  !  Take  our  advice,  old  man,  and  quit  while  the  quitting  is 
good !  ” 

MOUNT  ARARAT  FIRST  SEAPORT 

But  old  Noah  kept  hammering  away.  He  didn’t  know  where  he 
was  going,  but  he  did  know  there  was  going  to  be  need  of  water 
transportation — and  he  was  right.  A  more  unlikely  seaport  than 
Mount  Ararat  would  be  hard  to  imagine,  and  yet  it  did  become,  so 
far  as  history  records,  the  first  and  most  successful  seaport  in  the 
world. 

From  that  time  to  this,  a  lapse  of  thousands  of  years,  every  man 
who  throws  himself  whole-heartedly  in  the  struggle  for  inland  and 
coastwise  waterways  transportation  meets  the  same  objections  and 
criticisms  that  old  Noah  met;  but  they  have  continued  as  deter¬ 
minedly  as  the  old  man,  and  time  and  experience  are  dumbfounding 
their  critics,  even  as  Noah  did  when  his  ark,  with  its  precious  burden 
of  freight,  rose  upon  the  crest  of  the  waters  and  saved  the  faithful 
few  of  those  days  who  believed  in  water  transportation. 

EXPANSION  OF  CIVILIZATION  AND  TRANSPORTATION 

The  expansion  of  civilization  is  coincident  with  the  expansion  of 
transportation.  Wherever  civilization  may  have  first  appeared,  it 
spread  solely  through  contact  with  the  outside  world;  and  only  as 

(1) 


2 


fast  as  such  contact  could  be  made.  First  such  contact  was  made 
by  means  of  the  legs  of  the  human  being,  then  through  the  animals 
he  trained  to  transport  him ;  then  through  the  slow-running  vehicle, 
developing  into  the  railroad  trains,  the  automobile,  and  the  air¬ 
planes  of  to-day. 

The  log  that  drifted  downstream,  the  sluggish  flat-bottom  raft 
propelled  by  poles,  developed  into  the  ocean  racers  and  the  mar¬ 
velous  towboats  of  to-day. 

In  its  ultimate  analysis,  all  communication  between  individuals, 
between  communities,  between  states  and  nations,  is  some  form  of 
transportation.  Speech  is  the  transportation  of  sound  through  the 
air — the  telephone,  the  telegraph,  the  wireless,  the  heliograph,  all 
depend  upon  the  transportation  of  sound  or  signals — and  so,  as 
civilization  expanded,  its  onward  course  was  marked  and  limited  by 
the  development  of  transportation. 

With  the  growth  of  civilization  began  the  growth  of  trade  and 
commerce.  As  these  took  the  form  of  water  carriage  and  venture¬ 
some  voyages,  the  necessity  for  agreements  between  neighboring  sea 
cities  became  apparent — harbors  and  lighthouses  must  be  constructed 
for  the  safety  of  trade — and  so  began  that  slow  growth  of  mutual 
agreement,  mutual  accommodation,  which  is  to-day  the  basis  of  so 
much  international  law  as  exists. 

NECESSITY  DEVELOPS  TRANSPORTATION 

Transportation  brings  from  one  end  of  the  world  to  the  other  the 
products  of  nature  and  of  men,  and  as  the  necessity  of  these  products, 
be  they  raw  or  manufactured,  grows,  so  must  transportation  facili¬ 
ties  advance. 

Civilization  brings  in  its  train  the  demand  for  necessities,  com¬ 
forts,  and  luxuries,  in  the  order  named.  Nature  has  ordained  that 
the  raw  material  needed  in  the  manufacture  and  production  of  neces¬ 
sities,  comfort,  and  luxuries  should  grow  in  widely  separated  por¬ 
tions  of  the  globe.  Certain  kinds  of  grain,  rice,  sugar  cane,  etc., 
grow  only  in  certain  localities;  various  kinds  of  ores  are  produced 
at  one  place  and  turned  into  steel,  iron,  etc.,  at  another  place.  The 
silks  of  China  and  J apan  are  as  actual  necessities  to  our  women  folks 
to-day  as  are  the  farming  implements  of  America,  the  products  of 
our  great  steel  industries,  our  locomotives,  all  of  our  exports,  to 
South  America,  Europe,  Asia,  Africa,  and  Australia. 

Now  the  laws  of  economical  production  demand  that  great  manu¬ 
facturing  centers  shall  be  located  where  cheap  raw  material  can  be 
obtained,  and  where  the  cost  of  distribution  of  the  manufactured 
'  article  is  cheapest.  A  combination  of  these  two  elements,  where  the 
raw  material  is  an  import,  naturally  suggests  a  seaport.  If  the  dis¬ 
tribution  can  also  be  made  from  that  seaport,  so  much  the  better. 
The  sea  is  a  universal  highway,  and  the  cheapest  means  of  trans¬ 
portation  known  is  by  the  sea.  The  reason  for  this  is  self-evident. 

Consequently,  every  inland  city,  located  upon  a  navigable  water¬ 
way,  dreams  of  the  time  when  it  shall  be  an  inland  seaport,  and  if 
our  navigable  highways  are  developed  as  they  should  be,  it  will  only 
be  a  matter  of  a  few  years  till  such  cities  as  the  twin  cities  of  St. 
Paul  and  Minneapolis,  Cincinnati,  Pittsburgh,  St.  Louis,  Kansas 


3 


City,  Omaha,  Montgomery,  Albany,  Cairo,  Memphis,  Birmingham, 
Vicksburg,  and  many  others  will  be  actually,  if  not  geographically, 
seaports. 

SHOES  CITED  AS  AN  EXAMPLE 

One  little  example  will  illustrate  what  a  tremendous  advantage 
this  would  be : 

Where  are  the  great  tanneries  of  this  country  located?  In  the 
East,  near  the  seaboard,  and  in  Chicago.  Why  are  they  located 
there?  Because  the  tanned  hides  of  our  own  country  can  be  dis¬ 
tributed  from  Chicago  economically  through  the  Great  Lakes;  and 
domestic  raw  hides  can  reach  the  eastern  seaboard,  via  Duluth  or 
Chicago ;  while  the  raw  hides  of  South  America  can  reach  the  eastern 
coast  by  sea.  The  greatest  domestic  demands  for  leather  goods  are, 
of  course,  in  the  center  of  population,  densest  in  the  East,  and  next 
dense  around  Chicago.  Logically  then,  the  center  of  the  manufac¬ 
ture  of  leather  must  be  near  the  seacoast,  where  the  raw  material 
can  be  economically  collected,  and  the  manufactured  material  eco¬ 
nomically  distributed,  or  else  in  the  north  Mississippi  Valley,  in 
which  Chicago  is  included.  St.  Louis  is  a  large  shoe  manufacturing 
center.  Where  does  the  leather  come  from  ?  The  East !  Who  buys 
the  shoes?  Largely  the  inhabitants  of  the  Mississippi  Valley.  If 
it  is  realized  that  when  you  buy  a  pair  of  shoes  in  St.  Louis  you  are 
paying  the  freight  on  raw  material  that  went  to  New  England  when 
it  could  have  been  shipped  only  to  St.  Louis,  and  that  you  are  paying 
the  freight  on  leather  from  New  England  that  might  have  been  pro¬ 
duced  in  St.  Louis;  that  the  price  you  pay  for  shoes  of  St.  Louis 
manufacture  must  be  fixed  by  the  manufacturer  on  a  basis  that  will 
give  him  a  fair  profit  over  the  cost  of  manufacture  plus  the  freight 
of  raw  material  both  ways  from  New  England;  then  you  will  know 
that  the  only  reason  the  St.  Louis  manufacturer  competes  with  the 
New  England  manufacturer  in  this  particular  commodity  is  because 
of  the  freight  the  New  England  manufacturer  has  to  pay  on  his 
finished  product  to  distribute  it  to  St.  Louis  territory.  It  is  a  fact 
that  the  price  at  which  you  buy  your  shoes  is  fixed  by  something 
over  which  your  manufacturer  has  no  control ;  that  is,  transportation. 

OPPORTUNITY  FOR  RIVER  CITIES 

The  river  cities  of  the  Mississippi  Valley  have  to-day  in  their 
grasp  the  same  facilities  as  the  seaports  of  New  England. 

To  continue  my  illustration  about  the  shoes,  and  confining  it  to 
St.  Louis  because  it  is  a  great  shoe  manufacturing  center:  Suppose 
there  were  great  tanneries  located  there;  hides  from  South  America 
could  be  delivered  there  as  cheaply  as  at  New  England,  via  ship  to 
New  Orleans  and  by  barge  line  to  St.  Louis.  They  could  be  con¬ 
verted  into  leather,  and  the  leather  into  shoes,  and  the  shoes  shipped 
to  South  America  and  sold  as  cheaply  as  they  are  now  sold  at  St. 
Louis,  because  the  necessary  costs  of  transportation  of  the  raw  ma¬ 
terial  and  the  distribution  of  the  finished  product  have  been  cut  in 
two,  and  the  people  of  the  Mississippi  Valley  would  be  getting  their 
shoes  and  their  harness  and  their  other  leather  goods  cheaper  by  the 
cost  of  transportation  of  2,000  miles  by  rail.  Your  St.  Louis  shoe 
41711°—  25 - 2 


1 


4 


manufacturer  would  then  find  a  ready  market  for  his  product  farther 
away  from  home,  where  his  cost  of  manufacture,  plus  the  transpor¬ 
tation,  would  be  less  than  the  New  England  cost  of  manufacture 
plus  his  transportation. 

You  can  take  this  particular  example  and  apply  it  to  any  par¬ 
ticular  article  Qf  manufacture  of  your  home  city,  and  see  how  it 
works  out.  I  recommend  it  as  being  worthy  of  a  few  moments 
concentration. 

II 

Now,  what  I  have  said  about  the  cities  along  the  Mississippi 
Valley  being  on  a  parity  with  seacoast  towns  is  strictly  true  only 
in  a  limited  sense. 

COMMON,  CONTRACT,  AND  PRIVATE  CARRIERS 

It  is  true  in  so  far  as  the  natural  location  and  navigable  waterway 
is  concerned,  but  how  far  it  is  true  depends  entirely  upon  the  trans¬ 
portation  facilities  which  operate  upon  that  navigable  waterway  as 
a  common  carrier.  A  common  carrier  is  one  who  holds  himself  out 
for  hire,  carrying  any  and  all  commodities  offered  at  rates  available 
and  published  to  the  public.  He  differs  from  a  contract  carrier,  who 
transports  for  a  favored  few  at  what  rates  he  can  get,  or  a  privately 
operated  carrier  which  transports  its  own  commodities  only.  Of  the 
three  carriers  the  one  of  infinitely  greater  public  benefit  is  the  com¬ 
mon  carrier,  the  one  which  is  obligated  to  take  anybody’s  goods  as 
offered.  The  United  States  has  only  one  common  carrier  operating 
upon  the  Mississippi  River,  and  that  is  the  Government  Barge  Line. 
The  law  creating  the  Inland  Waterways  Corporation  provides  that 
this  line  shall  be  operated  precisely  as  if  it  were  privately  owned, 
and  is  a  demonstration  intended  to  prove  that  water  transportation 
is  economical,  feasible,  and  of  immense  public  importance.  Too 
many  people  are  inclined  to  look  upon  it  as  an  eleemosynary  institu¬ 
tion,  and  because  it  is  operated  by  the  Government  to  demand  special 
privileges  that  no  private  transportation  agency  would  give. 

Let  me  assure  you,  my  readers,  that  upon  the  success  of  this  barge 
line  operated  by  the  Government  as  a  private  organization,  depends 
your  hopes  of  cheap  water  transportation,  your  seaport  ambitions, 
and  the  consequent  reduction  in  price  of  all  necessary  commodities. 

THE  UNITED  STATES  AS  AN  OPERATOR 

The  barge  line  is  but  in  its  infancy.  It  has  had  Government  sup¬ 
port  because  in  no  other  way  could  waterway  transportation  survive 
the  vicious  onslaughts  of  its  opponents.  The  Government  has  spent 
untold  fortunes  in  the  development  of  waterways  under  the  theory 
that  their  development  will  bring  about  the  desired  results  of  cheap 
transportation,  and  plenty  of  it.  If  the  war  hadn’t  come  along  and 
forced  water  transportation  back  on  the  map,  you  wouldn’t  have  any 
inland  transportation  on  waterways  of  national  importance.  Con¬ 
ceived  as  a  war  measure,  carried  on  as  an  experiment  after  the  war, 
hampered  by  every  conceivable  opposition,  an  opposition  that  would 
have  driven  any  private  corporation  out  of  business,  it  has  demon- 


5 


strated  that  where  there  are  navigable  rivers  or  canals,  where  there 
are  suitable  and  sufficient  carriers,  where  there  is  a  balanced  traffic, 
where  there  are  interchange  relations  with  the  railroads  (which 
waterways  merely  supplement),  and  a  fair  division  of  revenue 
secured  for  joint  performance  of  transportation,  that  water  trans¬ 
portation  is  feasible,  economical,  and  a  necessity.  As  it  develops 
so  will  the  seaport  advantages  of  inland  cities  become  more  and  more 
real. 

HOW  RIVER  CITIES  MAY  UTILIZE  THEIR  OPPORTUNITIES 

These  seaport  advantages  will  become  realized  for  all  cities  upon 
navigable  streams  if,  when  the  aforementioned  five  essential  condi¬ 
tions  for  success  are  fulfilled,  the  lines  now  operated  by  the  Govern¬ 
ment  pass  into  private  or  corporate  control,  and  the  money  so  re¬ 
ceived  is  applied  to  the  creation  of  new  transportation  facilities  upon 
other  navigable  streams.  In  this  way  the  initial  war  expenditure 
of  $13,000,000  can  be  utilized  over  and  over  to  the  great  and  increas¬ 
ing  profit  of  all  of  our  citizens.  The  advantage  of  governmental  opera¬ 
tion  of  waterways  until  they  are  commercially  successful  is  apparent 
when  it  can  be  said  without  dispute  that  had  not  the  Government 
carried  on  the  Mississippi- Warrior  service  until  practically  all  five 
essential  conditions  of  success  were  fulfilled,  no  other  organization 
would  have  attempted  it  and  carried  it  to  success,  because  the  initial 
losses,  delays,  etc.,  were  intolerable  to  an  organization  whose  sole 
purpose  was  to  realize  a  return  upon  an  investment. 

OBJECTIONABLE  FEATURES  OF  GOVERNMENTAL  OPERATION 

But  governmental  operation  of  transportation  facilities  had  three 
distinct  and  highly  objectionable  features,  at  least  in  so  far  as  the 
operations  up  to  June  3,  1924,  were  concerned. 

A  transportation  agency,  to  gain  public  support,  must  offer  some 
assurance  of  being  durably  established,  of  being  dependable,  as 
well  as  economical.  Trade  moves  in  well-established  lanes,  and  in 
order  to  divert  traffic  to  other  lanes  (even  when  the  old  lanes  are 
thoroughly  congested)  the  shipper  must  have  assurance  of  service — 
good,  continued,  cheap  service.  So  long  as  the  maintenance  of  the 
barge  line  on  the  Mississippi,  on  the  New  Orleans-Mobile  coastal 
route,  on  the  Warrior  River,  depended  upon  the  whim  of  Congress, 
so  long  there  remained  in  the  minds  of  the  shipper  four  questions: 

(a)  How  long  will  it  be  operated  by  the  Government? 

(Z>)  Will  the  Government  dispose  of  it,  and  howT? 

( c )  If  the  Government  disposes  of  it,  will  it  be  continued  along 
the  same  lines? 

( d )  Is  it  good  business  policy  for  me  to  use  this  line  until  these 
conditions  are  ascertained? 

The  second  objection  to  governmental  operation  was  that  so  long 
as  it  lasted  under  the  conditions  which  then  existed,  so  long  was 
political  pressure  brought  to  bear  upon  those  responsible  for  its 
operation  for  discrimination  in  favor  of  individuals,  communities, 
cities,  etc.,  to  the  detriment  of  the  people  at  large,  and  in  violation 
of  every  principle  of  economic  transportation. 


6 


BIG  DRAWBACKS  CITED 

The  third,  and  to  my  mind,  the  most  objectionable  feature  of  all 
was  the  inability  to  properly  finance  the  undertaking  in  a  thoroughly 
businesslike  way. 

To  illustrate,  the  barge  lines  mentioned  represent  at  to-day’s  valua¬ 
tion  by  the  American  Appraisal  Co.  of  Milwaukee,  about  a  $10,- 
000,000  investment.  The  law,  as  I  have  said  before,  provided  that 
the  transportation  facilities  in  commission  should  be  operated  pre¬ 
cisely  as  if  they  were  a  private  transportation  agency.  It  also  pro¬ 
vided  that  no  governmental  organization  should  create  a  deficit. 
Every  transportation  agency  has  its  ups  and  down.  Some  years 
the  earnings  are  very  good,  and  others  are  poor.  But  a  transporta¬ 
tion  corporation  is  amply  competent,  under  its  charter,  to  finance 
the  poor  years,  or  else  it  becomes  bankrupt. 

If,  however,  the  barge  line  on  the  Mississippi  (which  is  the  only 
profitable  one,  and  which  supports  the  Warrior  and  New  Orleans- 
Mobile  section)  meets  a  long  season  of  low  water  where  navigation 
is  wholly  or  partially  suspended  (as  was  the  case  for  three  months 
of  every  year),  then  the  accumulated  surplus  rapidly  disappears, 
the  revenues  fail;  and  when  the  available  cash  assets  only  equal 
the  outstanding  indebtedness,  when  a  continued  operation  creates  a 
deficit,  those  in  charge  of  the  operations  were  between  the  devil  and 
the  deep  blue  sea. 

If  Congress  were  in  session,  an  appeal  for  funds  might,  of  course, 
have  been  made  to  them  to  tide  over  the  emergency.  Let  us  assume, 
however,  that  through  some  political  upheavel  or  through  trading 
and  bargaining  the  friends  of  waterways  had  become  a  minority; 
then  the  money  was  not  forthcoming,  and  the  operation  ceased. 
What  a  ridiculous  situation  would  have  arisen !  Here  was  a  per¬ 
fectly  solvent  transportation  agency,  worth  $10,000,000,  with  avail¬ 
able  collectible  cash  assets,  let  us  say,  $10,000  less  than  its  outstanding 
indebtedness.  Due  to  temporary  business  depression  it  was  not  mak¬ 
ing  enough  to  carry  the  continued  losses  of  a  branch  line.  It  had, 
under  the  law7,  to  operate  that  line.  It  could  not  create  a  deficit.  If 
it  had  had  the  povrer  to  raise  money  on  its  own  assets,  to  borrow7,  it 
could  easily  have  borrowed  from  banks  and  paid  the  money  back 
gradually,  and  the  public  would  not  have  lost  its  confidence  in  the 
line  because  it  could  not  pay  its  current  obligations.  Loss  of  public 
confidence  results  in  incalculable  harm. 

And  the  further  curious  situation  would  have  arisen  that  if  the 
line  had  been  compelled  to  discontinue  its  operations  because  it  w7as 
incurring  a  deficit,  the  same  rule  would  have  held,  and  no  one  could 
have  been  employed  to  keep  it  in  condition,  else  a  deficit  would  still 
be  created.  It  would  have  to  be  tied  up  to  a  bank  or  sold  for  a  song. 

I  have,  of  course,  in  this  last  paragraph  employed  the  reductio  ad 
absurdum  method  to  illustrate  my  point,  w7hich  is  that  the  lack  of 
powder  to  finance  itself  w7as  a  very  serious  proposition  that  the  prede¬ 
cessor  of  this  corporation  ran  up  against  in  a  very  practical  way  in 
its  effort  to  comply  wTith  the  law7  which  provided  that  these  boats  and 
barges  and  other  transportation  facilities  should  be  so  utilized  as  to 
maintain  in  full  vigor  both  water  and  rail  transportation. 


7 


III 

This  country  of  ours  has  passed  through  two  stages  of  trans¬ 
portation,  and  is  passing  now  through  the  third  stage.  We  can 
roughly  segregate  them  into  the  days  of  wagon  and  water  trans¬ 
portation,  the  days  of  rail  transportation,  and  the  present  days; 
where  transportation  demands  include  the  utilization  of  every  avail¬ 
able  means  of  transportation,  rail,  water,  motor,  and  air,  in  order 
to  meet  the  expanding  needs  of  our  interior  commerce. 

SOME  CURIOUS  RESULTS  OF  MODERN  TRANSPORTATION 

When  I  tell  you  that  a  large  manufacturing  concern  of  Alabama, 
which  uses  a  certain  kind  of  ore  in  its  manufactures,  and  owns  its 
own  mines  of  this  ore  in  the  State  of  Alabama,  can  yet  get  this  same 
ore  from  Sweden,  transport  it  by  sea  to  Mobile,  thence  by  our  War¬ 
rior  line  to  Tuscaloosa,  Ala.,  and  deliver  it  at  its  plant  cheaper  than 
it  can  produce  its  own  ore  at  its  own  mines,  and  transport  it  by  rail 
to  its  manufactory,  it  will  be  brought  home  to  you  that  there  is  some¬ 
thing  radically  wrong  in  the  present  situation. 

And  when  I  supplement  this  by  telling  you  that  the  Aluminum 
Ore  Co.,  located  at  East  St.  Louis,  and  owning  its  own  bauxite 
mines  in  Arizona,  can,  by  operating  its  own  ships  from  its  own  mines 
in  the  Guianas  of  South  America,  and  utilizing  the  Mississippi 
service  from  New  Orleans  to  St.  Louis  (paying  the  barge  line  $3 
per  ton  for  its  transportation),  and  does  do  it  more  cheaply  than  it 
can  deliver  at  St.  Louis  bauxite  from  its  Arizona  mines,  you  will 
be  perhaps  convinced  that  there  is  vast  benefit  to  be  derived  from  the 
utilization  of  waterways;  and  please  note  that  this  particular  opera¬ 
tion  affects  your  household  personally  in  the  price  of  every  article  of 
aluminum  ware  that  is  used  therein. 

As  offsetting  the  disadvantage  of  the  Alabama  firm  in  its  competi¬ 
tion  with  Swedish  products,  it  is  interesting  to  note  that  this  same 
aluminum  company  of  East  St.  Louis  turns  part  of  its  bauxite,  re¬ 
ceived  as  above  described,  into  concentrates,  ships  the  same  to 
Sweden  by  barge  line  and  ocean  steamer,  and  sells  it  in  Sweden 
cheaper  than  Sweden  can  produce  the  same  concentrates;  all  on 
account  of  cheap  water  transportation ! 

WATERWAYS  NOT  INDEPENDENT 

Water  transportation  has  inherent  advantages  and  inherent  disad¬ 
vantages.  I  shall  try  to  point  these  out  in  detail  in  the  course  of 
these  articles.  I  noticed  in  a  recent  letter  published  by  one  of  our 
foremost  railroad  presidents,  that  he  contends  that  if  all  available 
waterways  in  the  United  States  were  utilized,  the  sum  total  of 
freight  so  transported  would  not  make  a  big  dent  in  the  sum  total 
carried  by  the  railroads.  I  am  not  sure,  but  I  think  he  excepted 
lake  traffic.  I  presume  that  the  underlying  idea  in  his  mind  was 
the  fact  that  railways  can  operate  independently  as  common  car¬ 
riers,  regardless  of  the  waterways,  while  common  carriers  by  water 
can  not  exist  independently  of  railroads,  nor  do  they  so  seek  to  do. 


8 


REASONS  FOR  RAILWAY  OPPOSITION 

The  fact  is  that  since  inland-waterway  traffic  was  driven  from  our 
navigable  streams  and  canals  by  the  sheer  force  of  the  establishment 
of  the  steam  engine,  most  railroad  men  have  in  the  back  of  their 
heads  the  idea  that  the  utilization  of  our  waterways  for  transporta¬ 
tion  purposes  forms  a  menace  to  the  success  of  railroads,  and,  since 
they  have  been  destroyed,  he  feels  that  they  should  be  kept  from 
springing  to  life,  phoenixlike,  by  every  means  in  his  power. 

There  is  a  reason  for  this,  and  it  is  not  far  to  seek.  Advocates  of 
waterways,  for  years  after  transportation  facilities  had  been  driven 
from  them,  persisted  in  their  further  development,  not  in  the  hope 
of  utilizing  them  as  actual  carriers,  but  as  a  means  of  clubbing  the 
railroads  into  submission. 

By  the  very  force  of  their  arguments  and  clubbing  and  in  self- 
protection,  the  railroads  did  what  they  are  now  so  vigorously  as¬ 
sailed  for  doing ;  that  is,  introduced  the  practice  of  charging  less  for 
a  long  haul  than  for  a  shorter. 

The  present  structure  of  rail  rates  throughout  the  United  States 
has  been  formed  of  necessity  through  various  exigencies  which  arose 
at  sundry  times,  and  whole  communities  have  been  built  up  on  the  basis 
of  such  rates,  so  that  it  necessarily  follows  that  any  radical  readjust¬ 
ment  of  rail  rates — so  frequently  suggested  to  the  Interstate  Com¬ 
merce  Commission — would  result  in  wholesale  hardship. 

HOW  PRESENT  CONDITIONS  AROSE 

These  two  things — that  is,  the  destruction  of  water  transportation 
and  the  building  up  of  the  present  structure  of  rail  rates — are  so 
correlated  that  in  fairness  to  all  concerned  they  should  be  considered 
together,  and  in  so  considering  them  there  should  be  traced  the 
underlying  causes,  if  possible,  as  to  why  the  present  status  exists  in 
regard  to  transportation ;  and  then  to  present  logical  reasons  why  the 
present  intolerable  situation  should  be  modified. 

The  transportation  problems  of  the  original  thirteen  Colonies 
were  vastly  different  from  the  present-day  problems  of  the  United 
States.  Sparsely  populated,  strung  along  the  seacoast,  dependent 
to  a  large  extent  upon  supplies  from  overseas,  the  necessities  of 
interior  transportation  were  largely  confined  to  communication  and 
marketing  of  agricultural  products  in  the  larger  towns.  Such  trans¬ 
fer  of  commodities  as  took  place  between  the  States  was  done  by  sail¬ 
boats.  The  first  crying  necessity  of  interior  transportation  was  met 
by  the  building  of  roads,  and  it  is  worthy  of  note  that  the  cry  of  to¬ 
day  that  is  being  met  by  States  and  the  United  States  is  for  more  and 
better  roads.  Allow  me  to  interject  here  that  it  is  far  cheaper  to 
utilize  waterways  as  means  of  transportation,  where  available,  than 
it  is  to  construct  and  utilize  good  roads,  keep  them  in  repair,  etc., 
yet  most  of  the  opponents  of  waterway  development  as  a  cheaper 
means  of  transportation  urge  the  necessity  of  good  roads.  This  is 
illogical  and  short-sighted,  because  properly  supplemented  by  water¬ 
ways  and  coordinated  with  them  these  roads  are  the  capillaries  which 
in  turn  feed  the  veins  (the  lesser  rivers),  and  these  finally  unite  in  a 
great  artery  of  water  transportation.  That  is  precisely  the  course  of 
reasoning  followed  by  our  ancestors,  and  we  see  them  supplementing 


9 


such  roads  as  they  had  by  the  utilization  of  rivers  and  the  projection 
of  canals.  No  one  can  gainsay  that  they  were  right  or  that  they 
were  far-sighted.  Just  suppose  the  steam  engine  had  not  been  in¬ 
vented,  they  would  have  carried  through  to  completion  their  very 
correct  ideas,  and  as  the  demands  for  transportation  grew  (as  they 
would  have  grown,  only  more  slowly  than  with  the  railroads)  they 
would  have  been  compelled  to  utilize  rivers  and  canals,  to  make  them 
more  and  more  navigable,  until  to-day  we  would  have  in  the  United 
States  river  and  canal  systems,  in  all  respects,  better  than  the  best  of 
Europe. 

Remember  that  these  ancestors  of  ours  came  from  thickly  popu¬ 
lated  countries  where,  as  far  as  they  knew,  waterways  had  always 
been  utilized  to  their  fullest  extent,  and  they  could  see  no  logical 
reason  why  they  should  not  be  so  utilized,  inasmuch  as  they  offered 
to  them  a  cheaper  means  of  transporting  commodities  in  bulk  than 
any  other  way.  And  it  is  interesting  to  note  that  the  many  forts 
which  guarded  the  country  as  the  empire  spread  its  western  way 
were  either  on  the  Lakes  or  rivers  or  junctions  of  rivers,  and  there 
sprang  up  those  marvelous  cities  of  Chicago,  Pittsburgh,  Cincinnati, 
St.  Louis,  etc.  Trading  ports  first,  their  natural  advantages  for  the 
collection  of  raw  materials  and  the  distribution  of  the  same,  led  in¬ 
evitably  to  their  selection  as  manufacturing  centers,  where  the  raw 
material  could  be  cheaply  collected  and  the  manufactured  product 
cheaply  distributed. 

There  is  a  cycle  of  transportation  leading  to  saturation,  which  I 
shall  later  discuss,  but  it  is  sufficient  for  the  present  purposes  to 
observe  why  all  large  cities  of  the  United  States,  with  the  exception 
of  Indianapolis,  are  either  located  on  the  Lakes  or  on  rivers  which 
at  least  offer  the  potentialities  of  cheap  transportation. 

When  the  railroads  first  came  and  entered  the  transportation  field, 
their  activities  were  limited  to  the  transportation  of  commodities  of 
suitable  bulk  and  weight,  and  to  passenger  service,  and  did  no 
serious  damage  to  waterways.  As  the  design  and  power  of  the 
engines  and  cars  increased,  when  the  people  backing  the  railroads 
realized  their  infinite  possibilities,  then  began  a  growth  that  was 
paralleled  by  a  decrease  of  water  transportation  in  the  interior; 
because  of  this  fact  that  is  primarily  the  basis  of  the  need  and  success 
of  railway  transportation.  The  value  of  interior  waterways,  per 
se,  was  limited  by  physical  obstacles,  so  that  they  could  only  serve 
the  localities  directly  on  the  waterway,  whereas  the  railroad  could 
pass  through  mountains,  bridge  abysses,  and  thunder  along  any¬ 
where,  everywhere,  driving  directly  to  its  destination,  and  bringing 
peoples  of  the  same  country,  almost  strangers,  into  intimate  contact 
with  each  other  and  publishing  to  each  the  vast  possibilities  of  the 
different  sections  that  only  awaited  the  touch  of  this  modern  Midas 
to  change  them  into  gold. 

And  as  Territory  was  added  to  Territory,  the  necessity  of  such 
quick  and  dependable  communication  and  transportation  became 
vastly  enhanced,  and  the  broad  steel  rails  of  commerce  began  to 
ramify  in  every  direction,  and  to  parallel  inland  waterways,  be¬ 
cause  therein  lay,  in  many  instances,  the  most  economical  route  for 
construction.  Nor  was  this  expansion  accomplished  easily;  each 
railroad,  so  far  as  I  am  aware,  having  passed  through  reorganiza- 


10 


tion  after  reorganization  (the  public  paying  the  losses  in  freight 
and  passenger  service),  and  the  Government,  countries,  communities, 
etc.,  aiding  in  every  way  by  land  grants,  donations,  payments  for 
privileges,  etc.,  until  to-day  it  is  stated  on  unquestioned  authority 
that  the  land  grants  to  the  railroads  by  the  United  States  alone  ex¬ 
ceed  the  area  of  the  thirteen  original  Colonies.  To-day  there  is  in¬ 
vested  in  railroads  of  the  United  States,  twenty  billions  of  dollars. 
In  interior  waterways,  less  than  one  billion,  and  of  this  less  than  a 
billion  a  very  perceptible  percentage  has  gone  for  flood  control  and 
protection,  and  not  for  the  improvement  of  navigation. 

RAILROADS  CREATED  OWN  MARKETS 

In  spite  of  all  the  aid  that  the  railroads  had,  as  they  pushed  their 
way  through  sparsely  settled  communities,  ever  westward  and  north 
and  south,  the  financial  burden  upon  them  demanded  that  they 
create  communities,  towns,  and  cities  to  furnish  them  freight  enough 
to  pay  their  expenses  of  expansion  and  pioneering,  and  as  unfettered 
competition  sprang  up  amongst  railroads  touching  the  same  points 
by  various  routes,  began  that  system  of  rate  making  which  to-day 
has  become  so  involved  and  intricate.  A  certain  railroad  would 
induce  a  certain  manufactory  to  locate  at  a  certain  place  on  its 
line  by  offering  rates  for  transportation  for  that  particular  product 
that  would  enable  it  to  compete  successfully  in  the  same  market 
with  an  established  concern  located  on  some  other  railroad.  This 
manufactory  would  so  locate,  and  if  successful,  expand.  With  each 
expansion  came  more  people,  with  their  trinity  of  demands,  necessi¬ 
ties,  comforts,  luxuries.  So  the  town  or  community  or  city  grew 
and  thrived,  and  furnished  more  and  more  traffic  to  the  railroad; 
but  its  prosperity,  or  its  success,  was  built  upon  special  rates  which 
induced  the  original  manufactory  to  locate  there.  Now,  this  rate 
in  itself  may  seem  to  have  been  absolutely  without  warrant,  in  that 
it  easily  cost  more  to  handle  that  particular  freight  than  the  revenue 
derived  therefrom,  but  in  the  ultimate  analysis,  as  seen  by  the  rail¬ 
road,  justified  itself.  Perhaps  Jesuitical,  perhaps  not,  but  it  can  be 
seen  without  the  aid  of  a  microscope  that  a  multiplication  of  these 
instances  would  lead  to  outrageous  rate  cutting,  so  long  as  compet¬ 
ing  railroads  were  free  to  so  cut,  and  an  uplifting  now  of  these 
particular  rates  to  a  compensatory  basis  might  destroy  such  par¬ 
ticular  communities. 

SEE  BULK  FREIGHT  ON  RIVERS 

This  utilization  of  railroads  for  the  benefit  of  particular  com¬ 
munities,  however,  had  in  the  meantime  to  be  offset  by  the  carriage 
of  freight  of  a  more  profitable  nature,  and  the  covetous  eyes  of  the 
railroads  were  cast  upon  the  tremendous  bulk  freight  carried  by  the 
rivers  and  canals.  They  were  met  with  equal  covetousness  by  the 
river  communities,  which,  one  by  one,  sold  their  God-given  birth¬ 
right  for  a  mess  of  pottage.  In  the  meantime,  the  development  of 
our  interior  waterways  and  canals  was  being  pushed  along  with  an 
eye  single  to  the  immediate  advantage  of  individuals  or  waterway 
communities. 


11 

ATTITUDE  OF  WATER  ADVOCATES 

Thej7  sought  the  development  of  such  transportation  (if  indeed 
a  larger  majority  of  those  interested  thought  at  all),  not  particularly 
for  their  utilization  as  carriers,  but  as  a  potential  menace  to  the 
railroads  to  make  them  offer  cheap  transportation,  by  which  they 
would  profit  individually.  In  other  words,  the  pork  barrel  sprang 
into  existence,  whereb}^  the  Nation  as  a  whole  was  taxed  for  the 
benefit  of  a  limited  portion  of  it,  and  against  the  interests  of  the 
vast  majority.  They  played  into  the  hands  of  the  railroads,  and 
fell  easy  prey  to  their  sophisms,  even  as  many  do  to-day. 

APPRECIATION  OF  RAILROAD  ACCOMPLISHMENTS 

It  is  neither  my  desire  nor  my  intention  to  convey  the  idea  in  any 
way  that  I  do  not  appreciate  the  necessity  of  the  railroads,  that  I 
yield  to  anyone  in  my  admiration  for  their  effectiveness,  of  the 
genius  that  has  opened  up  a  continent  and  has  so  materially  con¬ 
tributed  to  our  commercial  prosperity,  or  that  I  advocate  in  any 
way  additional  restrictive  regulations  upon  them.  Rather  it  is  my 
purpose  to  show  that  the  railroads  are  not  the  only  ones  to  blame  for 
the  present  conditions,  but  that  a  larger  part  of  the  public  first 
coaxed  the  railroads  to  do  certain  things,  and  then  forced  certain 
uneconomic  conditions  upon  themselves  through  their  conceptions 
of  what  the  railroads  ought  to  do,  and  now  turn  in  a  fine  frenzy  and 
blame  the  railroads  for  creating  conditions  which  could  have  been 
avoided  if  some  one,  big  enough  to  command  sufficient  support, 
could  have  presented  to  the  public,  and  had  accepted  by  it,  a  broad 
scheme  of  national  transportation,  which  would  have  included  a 
coordinated  water,  rail,  and  good-road  system. 

HOW  RIVER  TRAFFIC  WAS  DESTROYED 

How  to  get  this  river  traffic  became  the  primary  object  of  those 
railroads  with  which  it  wras  in  direct  competition.  It  is  not  a  long 
story,  but  it  is  a  fateful  one,  for  they  did  get  the  traffic,  and  caused 
inland  water  transportation  to  become  practically  extinct.  They 
either  put  on  competing  lines  of  boats  and  carried  the  traffic  at 
ruinous  rates,  or  bought  out  the  independent  operators,  or  reduced 
their  own  rail  rates  in  competition  with  water  traffic,  and  offered 
such  inducement  to  ship  by  rail  that  they  gradually,  but  surely, 
gained  control  of  the  situation,  and  all  with  the  willing  acquiescence 
of  the  interested  public,  who  were  so  eager  for  the  transitory  advan¬ 
tages  they  seemed  to  be  getting  that  they  were  lulled  into  a  sound 
§leep  from  which  they  only  awakened  when  they  saw  that  their 
boats  had  gone,  that  their  rail  rates  had  risen,  and  that  there  seemed 
nothing  could  be  done  to  save  them. 

HOW  RAILROADS  RECOUPED 

In  the  meantime,  in  order  to  recoup  the  railroads  for  the  ruinous 
rates  they  were  furnishing  interested  cities,  a  rate  structure  grew  up 
throughout  the  interior,  whereby  those  not  fortunately  located  upon 

41711°— 25 - 3 


12 


river  banks  paid  the  railroad  in  increased  freight  rates  for  the 
savings  the  railroads  gave  those  fortunately  located.  And  not  only 
that,  but  the  practice  of  the  long  and  short  haul  rates  became  grad¬ 
ually  fixed,  and  apparently  immutable.  This  led  to  the  situation, 
even  along  navigable  streams,  where  the  railroads  charged  less  for 
a  long  haul  of  the  same  commodity  than  they  did  for  a  short  haul. 

The  practical  situation  was  this,  and  in  many  cases  it  continues 
to-day :  A  railroad  would  haul,  say  from  St.  Louis  to  Vicksburg,  via 
Meridian,  on  its  own  line,  for  less  than  it  charged  to  haul  the  same 
amount  of  freight  from  St.  Louis  to  Meridian.  The  theory  on  which 
the  railroads  based  these  rates  was  that  a  long  haul  was  cheaper  than 
a  shorter  one,  and  there  may  be  some  justification  in  such  a  theory  if 
terminal  handlings  were  eliminated. 

Having  eliminated  inland  water-borne  traffic,  the  railroads  then 
turned  upon  one  another,  and  a  series  of  rate  wars  ensued,  weak  lines 
were  bankrupted  or  absorbed,  until  the  situation  resulted,  in  1883,  in 
the  passage  of  the  interstate  commerce  act,  which  act  has  been 
amended  from  time  to  time  and  still  has  very  objectionable  features 
to  many. 

IV 

On  January  31,  1921,  the  Hon.  Benjamin  G.  Humphreys,  in  a 
speech  delivered  before  the  House  of  Representatives  on  “  How  the 
railroads  destroyed  competition  on  our  inland  waterways — long-and- 
short-haul  clause,”  arrives  at  the  following  conclusion : 

That  the  long-and-short-haul  clause  of  the  interstate  commerce 
act,  which  had  been  incorporated  in  the  interstate  commerce  act  for 
the  purpose  of  correcting  the  practice  of  the  railroads  by  which 
freight  rates  from  St.  Louis  to  river  competing  points  had  been 
reduced  beyond  a  point  at  ivliich  steamboats  could  survive,  but 
whereby  all  intermediate  points  and  inland  points  which  had  no 
river  transportation  were  compelled  to  pay  a  rate  sufficiently  high  to 
recoup  whatever  loss  they  (the  railroads)  sustained  by  reasons  of 
these  reductions  at  river  competing  points  (and  which  was  designed 
to  enable  the  commission  to  meet  exceptional  cases)  became  the  rule, 
and  under  it  the  railroads  continued  their  process  of  strangulation. 
He  argued  that  the  Senate  amendment  to  section  4  of  the  transporta¬ 
tion  act,  which  gave  the  Interstate  Commerce  Commission  authority 
in  regard  to  the  establishment  of  certain  rates,  and  specifically  ex¬ 
empting  them  from  the  power  of  fixing  such  rates  “on  account  of 
merely  potential  water  competition  not  actually  in  existence,”  put  a 
club  in  the  hands  of  the  railroads  to  absolutely  kill  private  water 
competition.  His  purpose  was  to  show  that  the  effect  of  this  amend¬ 
ment  was  of  no  benefit  to  anybody  but  the  railroads,  because  the 
railroads  are  not  allowed  to  fix  a  charge  that  is  not  reasonably  com¬ 
pensatory  for  the  service  performed,  and  asks  the  result.  He 
answers : 

SPEECH  OF  CONGRESSMAN  HUMPHREYS 

“  River  points  which  formerly  enjoyed  this  differential  are  denied  it,  but 
instead  of  lowering  the  rates  to  intermediate  points  the  railroads  have  simply 
raised  the  rates  to  river  points,  and  nobody  is  helped  in  this  process  except 
the  railroads.  It  is  suggested,  howrever,  that  the  river  is  still  there  and  that 
the  shippers  along  the  river  can,  if  they  have  the  enterprise,  put  steamboats 


13 


on  the  river  and  thereby  get  the  benefit  of  cheap  river  rates.'  If  they  do  this, 
however,  as  soon  as  their  boats  begin  to  haul  freight  from  St.  Louis  to  New 
Orleans  or  from  Memphis  to  New  Orleans  or  from  Vicksburg  to  New  Orleans 
the  competition  is  no  longer  “  merely  potential  ”  but  is  actual,  and  the  limita¬ 
tion  of  the  act  which  I  have  just  quoted  no  longer  applies.  The  railroads  can 
then  petition  the  Interstate  Commerce  Commission  for  permission  to  restore 
the  old  differential,  the  only  limitation  being  that  the  rate  must  be  “  reasonably, 
compensatory  for  the  services  performed.”  Now,  what  is  reasonably  com¬ 
pensatory?  The  Interstate  Commerce  Commission  is  not  supposed,  under  any 
circumstances,  to  permit  a  railroad  to  charge  a  rate  that  is  higher  than  a 
reasonably  compensatory  rate,  and  when  the  commission  fixes  or  approves  a 
rate  which  the  Mobile  &  Ohio,  for  instance,  can  charge  for  freight  from  St. 
Louis  through  Meridian  to  Vicksburg  they  are  supposed  to  have  fixed  the  mini¬ 
mum  rate  which  is  reasonably  compensatory. 

If  steamboats  were  put  on  the  Mississippi  River  and  to  meet  this  competi¬ 
tion  the  Mobile  &  Ohio  is  permitted  to  lower  its  rate  to  Vicksburg,  then  it 
should  in  all  conscience  be  required  to  make  a  proportionate  reduction  to  all 
points  along  that  road  between  Vicksburg  and  St.  Louis,  because  it  is  perfectly 
patent  that  if  the  rate  from  St.  Louis  through  Meridian  to  Vicksburg  is  reason¬ 
ably  compensatory  certainly  a  higher  rate  from  St.  Louis  to  Meridian  would 
be  unreasonably  compensatory  and  therefore  excessive  and  unjustifiable.  But 
we  know  that  the  Interstate  Commerce  Commission  has  permitted  this  very 
practice,  and  permitted  the  railroads,  thereby  deliberately  and  in  full  view  of 
everybody,  to  strangle  all  river  competition.  Now,  what  happens?  There 
being  no  actual  competition,  the  railroad  is  denied  the  right  to  give  the  river 
points  the  lower  rate.  It  is  then  in  order,  we  are  told,  for  the  shippers  to  put 
in  a  line  of  steamboats.  Who  will  invest  his  money  in  a  steamboat  line  when 
the  power  is  left  in  the  hands  of  the  Interstate  Commerce  Commission  to 
permit  the  railroads  to  renew  their  piratical  practice  as  soon  as  the  steamboat 
lines  begin  to  do  business? 

I  believe  in  improving  our  waterways,  and  I  am  going  to  vote  for  this  bill, 
but  I  do  it  in  the  hope  that  some  day  some  man  will  appear  here  whose  words 
are  more  persuasive  than  mine  have  been  and  who  will  be  able  to  convince 
Congress  of  the  error  of  its  way.  If  we  do  not  do  this,  if  we  permit  the  law  to 
stand  as  it  is,  the  time  is  not  far  distant  when  the  people  of  this  country  will 
refuse  to  sanction  further  public  expenditures  upon  rivers  of  our  country,  be¬ 
cause  with  this  sword  of  Damocles  hanging  over  his  head  no  business  man  is 
going  to  invest  his  money  in  a  steamboat  line,  and  there  will,  therefore,  never 
be  any  actual  river  competition  ;  and  until  there  is  such  competition  no  re¬ 
duction  in  railroad  rates  can  come  from  the  expenditure  of  money  for  the  im¬ 
provement  of  our  rivers,  because  the  law  says,  “  No  such  authorization  shall 
be  granted  on  account  of  merely  potential  water  competition  not  actually  in 
existence.” 

Now,  gentlemen,  if  we  are  going  to  preserve  the  rivers  of  the  country,  you 
can  not  do  it  by  merely  making  appropriations  for  them.  It  is  all  right  to 
improve  the  channels,  but  we  must  make  it  possible  for  the  boats  to  float  upon 
the  river  after  the  improvement  has  been  made.  That  can  not  be  done  so 
long  as  the  Interstate  Commerce  Commission  has  the  power  to  grant  the 
privilege  to  the  railroads  of  strangling  competition.” 

CYCLES  OF  TRANSPORTATION 

Sometime  before  in  this  series  of  articles  the  fact  was  mentioned 
that  there  is  a  cycle  in  transportation  which  leads  to  what  may  be 
termed  u  saturation. ’’ 

This  saturation  point  is  reached  for  any  city  when  the  cost  of 
collecting  the  raw  material  and  distributing  the  finished  product  is 
greater  for  that  particular  city  than  for  some  other  location;  and  it 
will  inevitably  result,  as  Chicago  has  reason  to  know,  in  the  abandon¬ 
ment  of  particular  manufactories  in  that  city,  and  the  establishment 
of  the  same  manufactory  in  some  other  more  suitably  located  com¬ 
munity,  where  the  transportation  facilities  are  not  saturated ;  and 
almost  always  the  new  point  selected  is  a  city  on  a  navigable  stream,. 


14 


the  Lakes  the  Gulf,  or  the  seacoast.  Let  us  examine  this  cycle  as 
it  has  worked  out  in  Pittsburgh.  The  location  of  the  steel  manufac¬ 
tories  at  that  particular  point  was  determined,  of  course,  by  the  fact 
that  ore,  coal,  and  other  articles  necessary  to  the  manufacture  of  steel 
could  be  assembled  there  more  cheaply  than  any  place  else  at  that 
time. 

The  establishment  of  the  steel  industry  drew  workers,  naturally, 
who  wanted  the  necessities,  the  comforts,  and  the  luxuries  of  life. 
As  the  industry  expanded,  more  raw  material  had  to  be  collected, 
more  finished  products  distributed,  more  workers  and  their  families 
came,  each  of  these  causes  contributing  to  an  ever  increasing  demand 
for  transportation.  This  cycle  expanded  continuously,  until  to-day 
the  Monongahela  River  is  carrying  annually  26,000,000  of  tons,  and 
the  Pennsylvania  Railroad,  instead  of  being  hurt,  has  four  times 
expanded  its  Monongahela  division,  which  is  practically  given  over 
to  freight  handling.  What  the  river  took  away  from  the  railroads 
in  its  handling  of  bulk  commodities,  it  returned  fourfold  to  the  rail¬ 
roads  in  the  creation  of  demands  for  supplies  and  distribution  that 
could  not  be  handled  by  the  river  alone. 

PRESENT  RAIL  POLICY 

The  city  now  has  its  own  acute  problem  of  near  saturation  to 
handle,  and  it  is  not  alone  in  that  predicament.  No  wonder  it  wants 
the  Ohio  opened  to  Cairo  and  the  Mississippi  to  the  Gulf.  When  it 
reaches  a  stage  where  it  costs  more  and  takes  longer  time  to  get  a  car 
in  and  out  of  a  city  like  New  York  than  it  does  to  move  it  from 
New  York  to  Philadelphia,  the  transportation  system  is  pretty 
well  saturated.  No  one  knows  this  better  than  the  railroads  do,  and 
no  one  knows  better  than  they  do  that  this  country  has  to-day  all  the 
main  rail  arteries  it  needs,  and  their  tendency  is  to  abandon  non¬ 
paying  branches,  to  concentrate  their  efforts  in  bettering  their  service 
instead  of  building  new  lines ;  to  group  together,  under  a  single  head, 
connecting,  parallel,  or  competing  routes,  enabling  them  thereby  to 
gradually  build  up  a  new  and  fair  system  of  rates  which  will  render 
them  a  reasonable  return,  and  to  abolish  as  quickly  as  possible  dis¬ 
criminatory  rates  which  they  themselves  do  not  desire  but  which, 
as  we  have  seen,  are  part  and  parcel  of  their  existence. 

These  conditions  being  as  they  are,  why  has  not  inland  waterway 
transportation  been  rejuvenated? 

How  can  it  be  ? 

SAFEGUARDS  FOR  WATER  TRANSPORTATION 

What  safeguards  have  been  thrown  around  inland  water  transpor¬ 
tation  by  law  that  can  be  utilized  to  their  fullest  extent  in  an  effort 
to  rejuvenate  it  ? 

They  are  principally  directed  toward  the  end  that  the  inland 
waterway  common  carriers  shall  be  protected  in  their  rights  to  set 
their  own  port-to-port  rates,  and  to  prevent  their  absorption  and 
annihilation  by  the  railroads. 

Briefly,  they  are:  (a)  In  the  interstate  commerce  act  it  provides 
that  a  common  water  carrier  shall  have  the  untrammeled  right  to 
make  its  own  port  to  port  rates  when  it  does  not  absorb  certain 


15 


charges,  but  does  provide  that  the  Interstate  Commerce  Commission 
shall  have  jurisdiction  when  such  charges  are  absorbed. 

(b)  When  interchange  with  railroads  subjects  the  water  carrier 
to  the  jurisdiction  of  the  Interstate  Commerce  Commission,  that 
body  has  specific  powers  to  regulate  joint  rates  and  their  divisions, 
and  to  compel  railroads  to  make  physical  connections. 

(c)  By  the  shipping  act,  1916,  the  authority  of  the  Shipping 
Board  over  waterway  common  carriers  is  limited  to  a  common  car¬ 
rier  by  water  in  foreign  commerce,  or  a  common  carrier  by  water  in 
interstate  commerce  on  the  high  seas  or  the  Great  Lakes  on  regular 
routes  from  port  to  port,  and  inland  waterway  port-to-port  rates  are 
exempted. 

( d )  By  the  Panama  Canal  act  it  is  unlawful  for  any  railroad  com¬ 
pany  or  other  common  carrier  subject  to  the  act  to  regulate  commerce 
to  own,  lease,  operate,  control,  or  have  any  interest  whatsoever  (by 
stock  ownership  or  otherwise,  either  directly,  indirectly,  through  any 
holding  company,  or  by  stockholders  or  directors  in  common,  or  in 
any  other  manner)  in  any  common  carrier  by  water  operated  through 
the  Panama  Canal  or  elsewhere  with  which  said  railroad  or  other 
carrier  aforesaid  does  or  may  compete  for  traffic  or  any  vessel  carry¬ 
ing  freight  or  passengers  upon  said  water  route  or  elsewhere  with 
which  said  railroad  or  other  carrier  aforesaid  does  or  may  compete 
for  traffic;  and  in  case  of  the  violation  of  this  provision  each  day 
in  which  such  violation  continues  shall  be  deemed  a  separate  offense. 

( e )  By  section  500  of  the  transportation  act,  it  is  declared  to  be 
the  policy  of  Congress  to  promote,  encourage,  and  develop  water 
transportation,  service,  and  facilities  in  connection  with  the  com¬ 
merce  of  the  United  States,  and  to  foster  and  preserve  in  full  vigor 
both  rail  and  water  transportation. 

(/)  By  Public  No.  185,  approved  June  3,  1924,  there  was  created 
the  Inland  Waterways  Corporation  with  certain  specific  functions 
to  be  performed,  and  this  will  be  discussed  in  the  next  article. 

V 

CREATION  OF  INLAND  WATERWAYS  CORPORATION 

The  passage  of  House  bill  8209  and  its  enactment  into  law,  June 
3,  1924,  creating  the  Inland  Waterways  Corporation  owned  by  the 
United  States,  offers  the  means  by  which  the  Government  can  demon¬ 
strate,  once  and  for  all,  the  feasibility  and  economic  value  of  water 
transportation,  and  when  such  demonstration  has  been  satisfactorily 
completed,  it  offers  satisfactory  means  by  which  there  can  be  re¬ 
established  upon  our  navigable  streams  and  canals  private  corpora¬ 
tions,  operating  common  carriers  which  will  be  of  mutual  benefit 
to  the  public  and  themselves. 

ANALYSIS  OF  NECESSITY  OF  A  CORPORATION 

I  know  of  no  better  means  to  emphasize  what  a  great  stride  has 
been  made  toward  this  desirable  end  than  to  analyze  the  bill,  to  point 
out  how  it  will  correct  existing  handicaps  of  governmental  operations 
by  the  Secretary  of  War  (which,  incidentally,  would  handicap  such 
operations  by  any  department  of  the  Government),  and  to  show  the 


16 


reasons  for  the  various  provisions  of  the  bill  and  the  objects  sought  to 
be  attained,  which  I  will  do  when  I  have  discussed  the  condition  that 
would  have  resulted  if  this  bill  had  not  passed.  The  failure  to  enact 
this  bill  into  law  would  have  meant  such  a  serious  setback  to  water 
transportation  as  to  have  retarded  the  development  of  our  rivers 
for  from  25  to  50  years.  The  Mississippi-Warrior  Barge  Line,  di¬ 
rectly  under  the  Secretary  of  War,  is  operated  as  nearly  like  a  private 
transportation  agency  as  existing  laws  and  regulations  will  permit. 
It  has  had  an  extremely  vicarious  existence,  but  through  a  persistent 
continuity  of  purpose  it  has  been  able  to  forge  ahead  under  the  most 
extremely  discouraging  circumstances.  If  this  continuity  were  de¬ 
stroyed,  if  new  men  and  new  methods  were  to  be  tried  out,  the  result 
was  bound  to  be  vastly  disturbing.  What  those  in  charge  of  these 
operations  in  Washington  know  is  the  result  of  experience.  We  have 
passed  the  stage  of  theorizing.  We  know  what  we  can  do  and  what 
can  not  be  done.  We  have  struggled  upward  till  we  can  see  assured 
success  now  that  our  efforts  will  be  allowed  to  culminate. 

HISTORY  OF  THE  ORGANIZATION 

Created  originally  as  a  war  measure  to  relieve  the  transportation 
congestion  existing  during  the  war,  and  operated  by  the  Railroad 
Administration,  when  the  transportation  facilities  thus  created  were 
turned  over  to  the  Secretary  of  War,  and  he  created  the  Inland  and 
Coastwise  Waterways  Service,  there  was  inherited  from  the  Rail¬ 
road  Administration  a  large  number  of  unexecuted  contracts  for  new 
boats,  a  nondescript  collection  of  vessels,  operating  at  a  tremendous 
loss,  and  rulings  of  the  Railroad  Administration  in  regard  to  the 
activities  of  the  barge  line,  that  in  my  judgment,  did  incalculable 
harm.  I  refer  to  the  regulations  and  restrictions  as  to  the  territory 
through  which  the  barge  line  might  operate  jointly  with  railroads, 
the  general  rules  for  interchange  of  commodities  with  the  railroads 
where  joint  operations  were  authorized,  and  the  division  of  accruing 
revenue  for  such  joint  service.  Water  transportation  was  prac¬ 
tically  nonexistent,  as  has  been  shown. 

PROBLEMS  CONFRONTED 

The  problem  that  the  Inland  and  Coastwise  Waterways  Service 
set  itself  to  solve  was  this : 

How  could  water  transportation  be  rejuvenated  and  made  profit¬ 
able  by  the  Government,  bearing  in  mind  the  fact  that  all  govern¬ 
mental  operation  is  hedged  about  by  laws  and  restrictions  and  de¬ 
cisions  of  the  comptroller  to  such  an  .extent  as  to  make  it  practically 
impossible  to  operate  as  a  private  corporation?  (The  existing  re¬ 
strictions  upon  the  Department  of  War  were  equally  restrictive  on 
any  other  department  of  the  Government.) 

What  could  be  done  to  bring  about  desired  results;  that  is,  the 
rehabilitation  of  transportation  facilities  on  navigable  rivers  and 
canals,  when  private  operators  had  been  driven  out  of  business? 

FACTIONS  AND  GENERAL  APATHY 

There  was  an  amazing  amount  of  apathy  throughout  the  country 
as  to  whether  our  waterways  were  utilized  or  not.  Those  who  were 


17 


at  all  interested  in  the  subject  of  the  development  of  rivers  and 
transportation  thereon,  divided  in  two  factions : 

One  faction  contended  that  the  streams  made  navigable  should 
be  utilized  purely  for  the  benefit  of  port-to-port  business,  and  as  a 
potential  menace  to  the  railroads  to  make  them  keep  down  their 
rates  paralleling  the  rivers.  The  other  faction  was  bitterly  op¬ 
posed  to  the  development  of  waterways  on  the  very  grounds  that  the 
first  side  advocated  it.  They  claimed  that  the  utilization  of  our 
rivers,  while  resulting  in  tremendous  benefits  to  the  cities  along 
their  banks,  giving  them  very  low  rates  in  comparison  to  interior 
rates,  was  a  detriment  to  the  interior  of  the  country  and  acted  to 
retard  their  development;  and  to  place  them  relatively  at  a  disad¬ 
vantage  to  river  cities  in  the  same  wa;y  that  the  long-and-short- 
haul  clause  of  the  interstate -commerce  act  worked  out  with  reference 
to  coast  and  interior  cities. 

I  well  remember,  in  the  early  days  of  the  Secretary  of  War’s 
administration,  what  a  frigid  reception  was  accorded  the  sugges¬ 
tion  that  if  all  of  the  people  of  the  United  States  were  to  be  taxed 
to  make  any  particular  stream  navigable  and  to  put  transportation 
facilities  upon  it,  then  the  benefits  of  these  transportation  facilities 
should  be  extended  to  the  interior  cities  as  well  as  to  the  cities  along 
the  banks  of  the  navigable  streams. 


PRESENT  GENERALLY  ACCEPTED  PRINCIPLES 


Now,  however,  I  think  I  am  safe  in  saying  that  it  is  generally 
accepted  by  the  proponents  of  waterways  that  they  must  rest  their 
case  upon  three  basic  principles: 

1.  That  there  is  not  enough  transportation  in  the  United  States, 
rail,  highway,  and  waterway,  to  meet  the  increasing  demands  of  the 
commerce  of  the  country,  and  that  to  meet  the  increasing  demands  of 
the  next  10  years  would  cost  the  railroads  a  billion  dollars  a  year 
for  10  years. 

The  history  of  our  commerce  shows  that  transportation  demands 
double  approximately  every  10  years;  and  if  the  railroads  alone 
are  to  meet  these  demands,  the  people  themselves  must  furnish,  prob¬ 
ably  by  direct  taxation,  such  as  surcharges,  increase  in  freight,  etc., 
this  ten  billion  dollars. 

2.  That  water  transportation  is  the  cheapest  means  of  transporta¬ 
tion  known. 

3.  That  the  people  as  a  whole,  having  been  taxed  to  create  navi¬ 
gable  waterways,  should,  as  far  as  practicable,  reap  the  benefit  of 
any  low  rates  inherent  in  such  transportation;  that  is,  the  water¬ 
ways  should  be  so  used  as  to  give  the  greatest  possible  benefit  to  the 
greatest  possible  number,  and  the  greatest  possible  amount  of  the 
ten  billion  the  railroads  would  require  ought  to  be  saved  by  the  utili¬ 
zation  of  water  transportation  already  or  nearly  available. 

SYNOPTIC  .CONCLUSIONS 

After  four  years’  experience  in  the  operation  of  governmental 
facilities  on  the  Mississippi  and  the  Warrior  Rivers,  the  New  York 
Canal,  and  the  intracoastal  sections,  I  have  formed  very  definite 


18 


and  decided  opinions  in  regard  to  such  operations.  Synoptically, 
they  may  be  stated  as  follows : 

1.  The  utilization  of '  our  great  streams  by  common  carriers  is 
the  only  fair  means  of  distributing  the  benefits  of  cheap  water 
transportation  to  the  very  people  who  have  been  taxed  to  create 
navigable  streams  and  canals. 

2.  The  rehabilitation  of  common  carriers  upon  our  navigable 
interior  waterways  can  only  be  accomplished  by  governmental 
pioneering. 

3.  There  were  various  handicaps  to  the  restoration  of  water  trans¬ 
portation  in  full  vigor,  by  governmental  operation,  that  delayed, 
restricted,  and  hampered  the  accomplishment  of  the  object  sought, 
and  such  handicaps  were  avoidable. 

I  think  no  one  will  deny  the  justice  of  my  first  premise. 

The  second  premise  is  based  upon  the  fact  that  the  creation  of 
the  very  conditions  essential  to  the  revival  of  the  common  carrier 
involve  in  their  creation  considerations  fraught  not  only  with  the 
possibility  but  the  probability  of  financial  disaster  to  a  private 
corporation  with  limited  capital — understanding  private  capital  will 
not  consider  such  a  dangerous  investment. 

CONDITIONS  PRECEDENT  TO  SUCCESS  OF  A  COMMON  CARRIER 

Broadly,  the  conditions  precedent  to  success  to  make  it  possible 
for  private  common  carrier  transportation  lines  to  exist,  may  be 
grouped  into  five  subdivisions.  There  must  be : 

1.  A  suitable  navigable  waterway. 

EQUIPMENT 

2.  Suitably  designed  equipment  for  each  particular  waterway ;  and 
that  suitable  equipment  must  be  determined  by  experiment. 

That  the  old  water-borne  transportation  equipment  and  its  meth¬ 
ods  of  operation  were  obsolete  is  proven  by  the  fact  that  it  had  been 
driven  out  of  existence.  The  development  of  a  transportation  agency 
to  success  must  be  gradual  and  healthy.  There  is  bound  to  be,  how¬ 
ever,  a  long  period  of  constructive  effort,  of  financial  outlay  without 
return,  before  such  constructive  effort  results  in  a  remunerative  re¬ 
turn.  The  history  of  all  our  railroads  has  been  that  of  ups  and 
downs,  and  there  is  too  much  demand  for  capital  in  assured  under¬ 
takings,  too  great  a  demand  for  quick  return  upon  an  investment, 
for  capital  to  pour  itself  unstintedly,  and  for  an  indefinite  period, 
into  an  undertaking  so  perilous  as  the  rehabilitation  of  a  form  of 
transportation  that  competition  had  utterly  destroyed. 

It  was  fortunate,  indeed,  for  the  revival  of  water-borne  commerce 
that  the  demands  of  war  brought  into  being  the  present  magnificent 
fleets  operated  by  this  corporation,  and  that  the  law  required  their 
operation,  because,  aside  from  the  other  fundamentals  of  success  that 
experience  has  brought  forward  in  their  proper  perspective,  while 
it  might  have  been  physically  possible  to  have  obtained  sufficient 
funds  to  inaugurate  a  service  of  local  importance  only,  a  service 
whereby  the  public  could  be  very  widely  benefited  could  not  possibly 
have  been  developed.  Financial  disaster  faced  it  from  the  start. 


19 


Indeed,  the  schemes  of  the  original  proponents  of  the  revival  of 
water-borne  transportation  on  the  Mississippi  were  so  strictly  limited 
in  their  application  that  their  proposed  line  was  not  to  be  even  a 
common  carrier,  but  a  contract  carrier,  and  the  freight  to  be  carried 
was  to  originate  in  or  be  destined  to  river  ports  or  their  immediate 
vicinity.  It  would  have  led  to  active  competition  and  the  destruction 
of  water  transportion  bv  its  active  and  determined  competitors  and 
the  consequent  delay  of  the  revival  of  such  commerce  for  another 
half  century.  But  it  is  an  entirely  different  thing  to  drive  an  inde¬ 
pendent  corporation,  with  limited  capital,  out  of  business,  and  to 
fight  against  the  expressed  policy  of  Congress  that  water-borne 
commerce  must  be  revived  (when  this  policy  is  supported  by  con¬ 
gressional  appropriation)  in  order  that  the  people  may  be  given  a 
chance  to  find  out  whether  or  not  the  hundreds  of  millions  of  dollars 
spent  in  making  waterways  navigable  is  a  success  or  a  colossal 
blunder. 

No  private  corporation  could  have  stood  up  under  the  determined 
effort  that  would  have  been  made  to  destroy  it.  The  large  initial 
outlay  of  funds,  the  years  of  loss,  the  lack  of  intelligent  interest  in 
what  was  being  sought  for,  and  the  pregnant  delays  in  the  matter  of 
adjudicating  differences  between  rail  and  water  carriers  could  only 
have  been  financed  by  Congress  and  only  have  become  successful 
because  backed  by  all  its  vast  powers. 

In  speaking  of  the  magnificent  fleets  in  the  preceding  paragraph, 
the  term  must  be  used  comparatively.  The  six  tunnel-type,  twin- 
screw,  oil-burning  towboats  of  the  Natchez  type  were  and  are  far 
superior  to  any  other  type  ever  put  on  our  rivers,  but  they  were 
theoretically  designed  and  had  to  be  altered  practically  to  meet  the 
conditions  of  actual  service.  Originally  designed  to  draw  7  feet, 
the  design  was  changed  to  allow  a  draft  of  7  feet  6  inches,  and  when 
finally  accepted  they  drew  8  feet  3  inches.  As  the  channel  project 
from  St.  Louis  to  Cairo  is  only  8  feet,  and  from  Cairo  to  New  Or¬ 
leans  only  9  feet,  it  is  not  to  be  wondered  at  that  during  low  stages 
navigation  is  sometimes  impracticable.  A  clearance  of  18  inches  is, 
in  my  judgment,  necessary  for  the  development  of  the  highest  horse¬ 
power  and  the  most  economical  operation. 

The  four  towboats  designed  for  the  upper  river  were  stern  wheel¬ 
ers  and  are  not  so  flexible  as  the  type  used  on  the  lower  river.  They 
were  also  coal  burners  and  had  to  be  converted  to  oil  burners.  The 
barges  on  the  lower  river  draw  8  feet  when  loaded  to  2,000  tons, 
and  the  upper-river  barges  carry  3,000  tons  with  about  the  same 
draft. 

The  lower-river  barges  are  square  ends,  the  upper  spoon  ends. 
The  lower-river  barges  (40)  were  designed  primarily  for  bulk 
freight  and  have  had  to  be  modified  greatly  by  “  ’  tween-decks  ”  to 
carry  all  kinds  of  merchandise.  The  upper-river  barges  were  also 
designed  to  carry  oil. 

A  combination  of  the  types  is  probably  the  ideal  barge,  while  the 
modern  towboat  would  be  diessel  direct  or  electric  drive,  about  200 
feet  long  by  40-odd  wide,  twin  or  multnple  screw,  tunnel  type,  draw¬ 
ing  from  4  feet  6  inches  to  5  feet  3  inches,  with  a  brake  horsepower 
of  not  less  than  1,500. 


20 


VI 

TERMINALS 

3.  There  must  be  suitable  terminals  and  balanced  freight  both 

ways. 

There  was,  and  still  is  to  an  appreciable  extent,  an  argument  as 
to  what  constitutes  a  suitable  terminal.  Suffice  to  say  that  suitable 
terminals  depend  upon  very  widely  different  conditions.  In  gen¬ 
eral,  they  may  be  classified  into  three  types — the  direct  lift,  the  con¬ 
veyor  type,  and  the  floating  terminal  with  incline. 

While  in  our  judgment  the  most  suitable  type  for  the  Mississippi 
is  the  floating  terminal  with  a  railroad  incline,  such  a  terminal  would 
be  out  of  place  on  the  Hudson. 

The  kind  of  terminal  to  be  built  depends  upon  the  character  of 
the  stream,  the  commodities  to  be  principally  handled,  whether  or 
not  there  is  to  be  interchange  with  the  railroads,  and  various  and 
sundry  other  local  considerations. 

BALANCED  FREIGHT 

By  a  balanced  traffic  is  meant  not  only  freight  both  ways  but 
freight  both  ways  of  both  high  and  low  revenue  production,  and 
that  kind  of  freight  is  only  going  to  be  procured  when  there  has 
been  built  up  a  dependable,  economical,  and  durable  service.  The 
distinction  made  between  dependable  and  durable  is  that  to  consti¬ 
tute  dependability  there  must  be  scheduled  sailings  on  which  reli¬ 
ance  may  be  placed  and  advantage  taken  of,  while  by  durable  is  con¬ 
veyed  the  idea  of  permanency. 

With  this  additional  element  of  necessity  to  successful  operation 
of  water-borne  transportation  enters  another  deterrent  element  to 
unadventurous  capital.  It  means  a  continuous  and  discouraging 
outlay  of  funds  for  an  indefinite  period  until  the  public  can  be  con¬ 
vinced  that  the  service  offered  is  economical,  dependable,  and  durable. 

INTERCHANGE  WITH  OTHER  CARRIERS 

4.  The  next  essential  condition  to  success  is  interchange  of  freight 
with  the  railroads.  Without  such  condition  being  fulfilled  the  only 
freight  that  can  be  handled  is  local  production;  that  is,  the  produce 
of  the  cities  situate  upon  the  navigable  stream  or  the  intermediate 
vicinity.  Certainly  it  is  unfair  discrimination  to  tax  the  public  at 
large  for  the  benefit  of  an  inconsiderable  portion  of  the  population 
fortunately  located.  If  the  public  at  large  is  to  be  benefited  by  the 
revival  of  water-borne  commerce  on  our  interior  rivers  and  canals, 
then  their  consignments  or  assignments  of  freight  must  reflect  some 
savings  due  to  the  use  of  such  rivers  or  canals.  And  to  reach  any 
of  the  public  to-dav  not  on  these  navigable  waters  and  to  let  them 
reap  the  benefits  or  cheaper  transportation  recourse  must  be  had  to 
railways  or  highways,  and  the  commerce  must  of  necessity  be  both 
rail  and  water-borne.  This  corporation  carries  freight  into  and  out 
of  3fi  different  States,  and  does  it  at  80  per  cent  of  the  all-rail  rate. 


21 


It  offers  every  shipper  in  the  United  States  a  rate  whereby  he  can 
market  or  receive  his  products  at  a  saving  of  at  least  20  cents  on 
every  dollar  of  freight  charges. 

OBSTACLES  TO  PRIVATE  OPERATION  AS  A  COMMON  CARRIER 

To  compel  the  railroads  to  enter  into  interchange  relations  with 
them,  the  water  carrier  would  at  once  become,  willy-nilly,  a  common 
carrier,  and  at  the  mercy  of  its  rail  connections  in  the  matter  of  the 
division  of  revenue  accruing  from  joint  hauls.  The  railroads  could 
and  would  have  said  in  effect,  “  You  will  take  what  share  of  the 
proceeds  we  voluntarily  give  you,  or  we  won’t  interchange.” 

As  the  railroads  could  not  own  competing  waterway  facilities, 
and  as  at  that  time  the  ostensible  object  of  waterway  proponents  was 
to  create  a  potential  menace  of  cheaper  transportation,  the  railroads 
could  very  properly  take  this  attitude,  and  in  addition  say,  which 
was  a  fact,  “Very  well,  the  rates  paralleling  the  Mississippi  River 
are  very  much  lower  than  the  rates  tor  the  same  distance  for  the  same 
commodities  in  the  interior.  If  you  insist  upon  taking  that  haul 
away  from  us,  we  must,  to  protect  our  stock  and  bond  holders,  insist 
that  we  get  some  tangible  return  for  hauling  something  to  you  over 
our  lines  and  giving  it  to  you,  thus  taking  the  long  haul  away  from 
ourselves.  We  can  only  give  you  these  reduced  rates  when  we  have 
the  entire  haul.  Such  local  preferential  rates  as  you  enjoy  are,  of 
themselves,  unjustifiable.” 

The  share  of  revenue  that  the  water  carrier  might  have  been  com¬ 
pelled  to  accept  under  this  condition  could  have  been  so  low  as  to 
be  very  unprofitable ;  and  it  would  not  have  been  a  difficult  matter  to 
flood  the  private  corporation  with  undesirable  freight  that  it  would 
have  to  carry  because  of  its  published  schedules,  to  the  exclusion  of 
other  freight  more  profitable  but  not  of  sufficient  importance  in 
itself  to  justify  the  maintenance  of  the  line. 

Now  this  condition,  to  some  extent,  befell  the  governmental  opera¬ 
tions,  and  led  to  the  enunciation  of  the  final  postulate  for  success; 
that  is — 

EQUITABLE  DIVISION  OF  REVENUE 

5.  There  must  be  an  equitable  division  of  revenue  accruing  to  both 
water  and  rail  transportation  for  a  combined  haul. 

Fortunately  there  exists  in  law  a  tribunal  with  effective  powers  for 
compelling  such  a  division,  the  Interstate  Commerce  Commission. 

The  Inland  Waterways  Corporation  ha§  interchange  relations 
with  approximately  165  railroads  in  the  United  States.  These  rail¬ 
roads  divide  their  joint  revenue  between  each  other  in  various  ways, 
depending  upon  a  multitude  of  conditions. 

An  attempt  was  made  in  briefs  submitted  and  argued  before  the 
Interstate  Commerce  Commission  to  enunciate  certain  principles  of 
general  application  upon  wThich  the  commission  could  base  an  order 
to  the  railroads  to  give  an  equitable  proportion  of  the  revenue  jointly 
earned  by  a  combined  rail  and  water  movement  to  the  water  carrier. 
It  required  from  October,  1920,  to  April,  1923,  to  get  any  decision 
from  the  Interstate  Commerce  Commission,  and,  considering  the 


22 


principles  involved,  the  vast  amount  of  data  considered,  the  errors 
that  crept  in,  the  number  of  defendants  cited  who  had  to  prepare 
their  answers,  this  delay  is  subject  to  no  criticism. 

The  last  case  presented  was  decided  in  four  months,  and  was  of 
vast  importance  to  all  waterways. 

Let  us  examine  the  final  condition  precedent  to  success — that  is, 
an  equitable  division  of  joint  revenue  earned  by  the  rail  and  water 
carriers  for  a  combined  service  performed — and  see  its  importance. 

A  great  import  for  the  Birmingham  steel  industries  through 
Mobile  is  manganese  ore.  It  is  a  commodity  especially  adapted  for 
water  transportation — great  bulk  and  weight. 

The  Government  built  a  coal  and  ore  handling  plant  at  Mobile  at 
a  cost  of  approximately  one-half  million  dollars  for  handling  these 
commodities.  The  rail  rate  on  this  ore  from  Mobile  to  Birmingham 
was  about  $3.15  per  ton.  The  barge  rate  was  80  per  cent  of  that. 
Shortly  after  the  ore  operations  on  the  Warrior  began  the  rail  lines 
reduced  their  rate  to  $2  per  ton.  The  water  rate  dropped  to  equal 
that,  too  lean  a  revenue  for  even  water  transportation.  It  can  easily 
be  demonstrated  that  $2  per  ton,  or  0.65  mill  per  ton  mile,  does  not 
pay  for  rail  carriage,  and  the  ore  must  be  hauled  at  less  than  the  cost 
of  operations.  Why  ?  To  discourage  the  continuance  of  the  Govern¬ 
ment  barge  line  and  to  deter  private  capital  from  embarking  on  a 
similar  enterprise. 

The  railroads  have  twice  reduced  the  rate  on  bauxite  ore  from  New 
Orleans  to  St.  Louis  since  the  Aluminum  Ore  Co.  entered  into  ne¬ 
gotiations  for  the  transfer  of  enormous  quantities  via  the  barge  line. 
Either  their  first  rate  was  t,oo  high  or  their  present  rate  is  too  low 
and  put  in  to  hurt  the  barge  line  or  discourage  private  capital  from 
competition. 

INTERSTATE  COMMERCE  COMMISSION 

These  rates  must  have  the  approval  of  the  Interstate  Commerce 
Commission  or  they  are  illegal.  If  that  branch  of  Government  is 
unable  to  curb  such  opposition  to  a  governmental  agency,  what 
chance  would  private  operation  have  against  united  railroad  oppo¬ 
sition?  (See  Congressman  Humphreys’  speech,  Actual  and  Poten¬ 
tial  Competition.) 

Now,  the  Interstate  Commerce  Commission  has  the  power  to  com¬ 
pel  equitable  divisions  between  rail  and  water  carriers  and  between 
allied  rail  carriers,  but  the  difficulty  of  determining  what  is  an 
equitable  division  is  immense. 

VII 

In  April,  1923,  the  commission  answered  a  brief  of  the  Govern¬ 
ment  practically  as  follows : 

There  are  too  many  conflicting  interests  to  render  it  possible  for  this  com¬ 
mission  to  render  a  blanket  decision  as  requested.  We  enunciate  certain  prin¬ 
ciples  which  we  desire  to  be  followed  in  negotiations  between  water  and  rail 
carriers.  If,  in  the  negotiations  such  as  we  recommend,  you  reach  a  breaking 
point  with  an  individual  railroad,  such  case  may  be  resubmitted  and  a  deci¬ 
sion  rendered. 

This  decision,  while  helpful  in  the  extreme  to  the  Government  as 
giving  it  authority  to  negotiate  separately  with  the  railroads,  would 


23 


form  a  most  imposing  obstacle  to  any  private  organization.  It  serves 
notice  on  the  railroads  that  so  long  as  governmental  operations  con¬ 
tinue,  so  long  as  Congress  appropriates  money  to  prove  the  practi¬ 
cability  of  water  transportation,  to  create  the  conditions  precedent  to 
success,  so  long  must  the  rail  and  water  routes  approach  the  subject 
in  a  proper  spirit  of  cooperation  and  coordination  and  not  of  hostile 
competition. 

It  creates  just  the  reverse  situation  so  far  as  private  operations  of 
waterways  is  considered. 

By  the  pursuit  of  tactics  formerly  successfully  employed,  this  de¬ 
cision  gives  railroads  the  whip  hand  over  private  water  enterprise. 

CONDITIONS  TO  BE  FACED 

These  are  conditions  which  must  be  faced.  If  it  is  impossible  for 
joint  rail  and  water  carriers,  cooperating,  to  give  cheaper  trans¬ 
portation  than  all-rail  with  a  division  of  earnings  affording  each  a 
living  revenue,  then  water  transportation  must  fail.  So  the  question 
of  what  is  a  living  revenue  for  each  to  exist  is  the  vital  question  to 
be  determined;  and  so  long  as  railroads  would  haA^e  the  upper  hand 
in  a  fight  with  a  private  transportation  agency,  it  Avould  seem  to  be 
a  Avise  thing  for  the  Government  to  do  to  so  organize  and  use  its 
existing  facilities  as  to  determine  this  question  accurately.  Once  it 
has  been  accurately  determined  that  such  combined  transportation 
facilities  can  carry  freight  more  cheaply,  and  at  a  reasonable  profit 
to  each,  once  the  conditions  have  been  established  upon  a  particular 
river,  then  Congress  may,  if  it  so  desires,  direct  the  sale  of  such 
existing  facility  under  such  restrictions  as  are  desirable,  and  the 
purchase  price  so  received  may  be  used  in  the  creation  of  similar  con¬ 
ditions  upon  other  rivers;  and  as  each  section  demonstrates  its  de¬ 
sirability  for  the  inA'estment  of  private  capital,  such  section  may  be 
sold.  It  would  only  be  a  matter  of  time  till  these  successful  trans¬ 
portation  agencies  Avould  ha\Te  established  enough  of  the  essential 
conditions  to  success,  through  laAv  and  Interstate  Commerce  Com¬ 
mission  decisions,  to  offer  private  capital  opportunities  for  original 
investment,  and  the  Government  could  then  either  cease  its  operations 
or  limit  them  to  particularly  difficult  operations,  Avhere  pioneering 
needs  still  might  exist. 

AVOIDABLE  HANDICAPS  OF  GOVERNMENTAL  OPERATION 

Let  us  examine  Avhat  the  avoidable  handicaps  of  go Arern mental 
operation  were,  and  see  Iioav  necessary  the  creation  of  this  corpora¬ 
tion  was  to  the  success  of  the  project: 

(a)  The  lack  of  certainty  on  the  part  of  the  shipping  public  as 
to  AArhether  governmental  operation  might  not  be  suddenly  abandoned 
altogether,  or  that  the  transportation  facilities  might  be  disposed  of 
to  interests  hostile  to  waterways;  either  of  which  contingencies  has 
a  marked  effect  on  the  decision  of  a  shipper  avIio  desires  economical, 
dependable,  and  permanent  service. 

(b)  The  fact  that  all  appropriations  made  by  Congress  for  the  old 
waterways  service,  under  existing  laAvs  Avere  for  periods  of  one  fiscal 
year  only,  and  the  money  appropriated  could  be  used  only  in  that 
fiscal  year,  for  the  exact  purpose  specified ;  and  there  Avas  no  assur- 


24 


ance  that  each  succeeding  Congress  would  appropriate  money.  No 
well-developed  plan  of  expansion  or  definite  policy  could  be  an¬ 
nounced  that  would  insure  the  public  of  a  dependable  and  durable 
service;  and  further,  in  addition  to  various  statutes  bearing  on  the 
expenditure  of  such  public  money,  the  Comptroller  General  of  the 
Treasury,  not  the  Secretary  of  War,  the  mandatory  of  Congress, 
was  the  final  judge  as  to  the  legality  of  such  expenditure;  and  the 
orders  of  the  Secretary  of  War  might  be  absolutely  vitiated  by  any 
of  the  comptroller’s  decisions,  regardless  of  the  necessity  of  such 
expenditure  for  the  purpose  of  carrying  out  the  mandate  of  Con¬ 
gress.  Surely  the  Secretary  of  War,  the  mandatory  of  Congress, 
charged  with  the  continued  operation  of  the  transportation  facili¬ 
ties  turned  over  to  him  ought  to  have  the  unhampered  power  to  do 
what  he  is  directed  by  Congress  to  do,  in  his  own  way,  and  not  ques¬ 
tioned  in  the  execution  of  a  general  policy  over  the  expenditure  of 
the  necessary  money  to  accomplish  it. 

(c)  Its  inability  to  finance  itself  in  periods  of  depression,  thus 
necessitating  an  appeal  to  Congress  for  funds,  opening  the  flood¬ 
gates  of  criticism,  with  the  resultant  agitation  as  to  whether  or  not 
Congress  would,  through  failure  to  appropriate,  cause  the  cessation 
of  an  operation  that  is  economically  sound,  the  destruction  of  a 
solvent  transportation  agency,  the  failure  of  a  successful  waterway 
demonstration,  because  of  the  law  against  a  Government  agency 
creating  a  deficit;  and  under  the  limits  set  by  such  conditions  the 
line  was  incapable  of  expansion  unless  there  was  a  further  extension 
of  governmental  ownership. 

PURPOSE  OF  PRESENT  LAW 

The  stated  purpose  of  the  bill  is — 

That  for  the  purpose  of  carrying  on  the  operations  of  the  Government-owned 
inland,  canal,  and  coastwise  waterways  system  to  the  point  where  the  system 
can  be  transferred  to  private  operations  to  the  best  advantage  of  the  Govern¬ 
ment,  of  carrying  out  the  mandates  of  Congress  prescribed  in  section  201  of 
the  transportation  act,  1920,  as  amended,  and  of  carrying  out  the  policy  enun¬ 
ciated  by  Congress  in  the  first  paragraph  of  section  500  of  such  act,  there  is 
created  a  corporation  to  be  known  as  the  Inland  Waterways  Corporation — 

which  corporation  is  to  be  governed  and  directed  by  the  Secretary 
of  War. 

BEST  INTERESTS  OF  THE  GOVERNMENT 

What  are  the  best  interests  of  the  Government,  and  when  can  the 
operations  be  transferred  to  private  corporations  with  the  best  ad¬ 
vantage  of  the  Government? 

One  of  the  common  objections  that  has  been  raised  to  this  project 
for  the  reestablishment  of  transportation  facilities  on  waterways  by 
the  Government  has  been  formulated  in  about  this  manner,  and 
usually  as  if  it  were  unanswerable :  “  Ah,  I  see  !  What  you  design  to 
do  is  to  let  the  Government  bear  all  the  losses,  and  as  soon  as  you 
have  developed  a  paying  institution  you  intend  to  turn  it  over  to 
private  interests.” 

Now,  that  is  not  a  fact.  Its  application  to  the  subject  under  con¬ 
sideration;  that  is,  the  rehabilitation  of  transportation  facilities  on 
inland  waterways,  is  based  on  wrong  premises,  and  ignorance  of  the 
exact  but  changing  status  of  the  facilities  under  consideration. 


25 


FIGURES  VS.  PROPAGANDA 

Those  facilities  which  exist  to-day  came  into  being  as  a  war 
measure.  They  represented  in  round  numbers,  on  July  1,  1921, 
$13,000,000,  invested  at  war-time  prices.  If  these  facilities  had  been 
disposed  of  on  the  basis  of  other  similar  equipment  created  for  war¬ 
time  purposes,  a  realization  of  5  cents  on  the  dollar  would  have  been 
more  than  the  average,  and  the  Government  could  possibly  have  ob¬ 
tained  $650,000  by  a  sale,  the  fleet  would  have  been  broken  up,  and 
waterway  commerce  on  the  Mississippi  and  Warrior  Rivers  destroyed. 

During  the  succeeding  fiscal  years,  including  all  appropriations 
made  for  1922,  1923,  and  1924  (fiscal  year  1922  begins  July  1,  1921, 
etc.),  there  was  appropriated  by  Congress  the  total  sum  of  $2,084,- 
650;  so  that  if  we  add  this  to  the  $650,000,  which  might  have  been 
realized  by  a  postwar  sale,  the  total  peace  investment  of  the  Govern¬ 
ment  in  this  project  is  $2,734,650. 

The  total  appraised  value  of  the  physical  assets  of  this  corpora¬ 
tion,  as  a  going  concern  (exclusive  of  any  value  for  good  will,  which 
usually  is  valued  at  10  per  cent),  is  almost  $10,000,000.  This  valua¬ 
tion  was  made  by  the  American  Appraisal  Co.  of  Milwaukee. 

In  other  words,  reduced  to  mere  figures,  the  Government  has, 
by  holding  on,  enhanced  the  value  of  its  investment  $7,625,350. 
Therefore,  the  best  interests  of  the  Government  can  be  conserved  by 
carrying  on  the  operations  until  they  are  so  successful  as  to  net  a 
6  per  cent  return  on  the  present-day  valuation,  and  then  disposing 
of  the  facilities  as  a  going  concern  to  private  capital  for  a  price  based 
on  a  6  per  cent  return  on  the  investment. 

WHY  GOVERNMENTAL  OPERATION? 

And  the  Government  can  well  afford  to  do  this,  because  several 
objects  are  gained: 

1.  It  will  salvage  seven  millions  that  otherwise  would  have  been 
written  off  as  a  war  loss. 

2.  The  barge  line  will  carry  in  round  numbers,  with  its  present 
facilities,  a  million  tons  a  year,  at  a  saving  to  the  public  of  $1,350,- 
000.  If  the  fleet  were  balanced,  it  could  carry  2,000,000  tons  a  year. 

3.  By  expanding  the  facilities  to  meet  the  growing  needs  of  trans¬ 
portation,  the  corporation  will  establish  itself  upon  a  paying  basis, 
and  return  revenue  to  the  Treasury  instead  of  taking  it  out,  and  its 
value  will  be  increased  b}T  just  so  much  more  additional  capital  as 
may  be  invested  therein. 

4.  It  will  demonstrate  beyond  question  that  water  transportation 
is  feasible  and  economical  and  that  when  certain  conditions  are 
established  it  offers  a  profitable  investment  for  capital;  and  capital 
will  freely  invest. 

VIII 

RESULTS  OF  CORPORATION  OPERATIONS 

(Corporation  organized  June  3,  1924) 

I  insert  here  what  the  corporation  is  actually  doing  on  the  Missis¬ 
sippi  River,  so  that  my  readers  may  not  be  led  astray  by  any  un¬ 
authorized  figures.  There  is  also  inserted  a  report  to  the  Director 
of  the  Budget. 


26 


Inland  Waterways  Corporation — Mississippi-Warrior  Service ,  Mississippi  Di¬ 
vision — Statement  of  income  for  the  calendar  year  1921f  and  the  months  of 
January  and  February ,  1925,  and  estimate  for  March,  1925. 


Tonnage 

handled 

Total 

revenue 

Total 

expenses, 

including 

depreciation 

Net  income 

Deprecia¬ 

tion 

Net  income 
exclusive 
of  depre¬ 
ciation 

1924 

January _ _ 

February  . . 

March. . 

April _ _ _ _ 

May _ _ _ 

June _ _  .  _ 

July... _ _ 

August.. _ _ 

September _ 

October.  _ _ _ 

November _ 

December _ 

Total  calendar  year 
1924 _ 

1925 

January _  .  _ 

February _ _ _ 

March2 _ 

82, 179 
80, 229 
74, 117 

81,  528 

69,  916 

82,  565 

70,  387 
76,  609 
80,  537 
57,  604 
39,  603 
54,  229 

$261,119.  61 
251,  422.  29 
258,  824.  67 
315,  322.  44 
288,  653.  34 
332,  972.  40 
285, 155. 13 
284,  806.  54 
278,  378.  23 
199,  097.  04 
152,  047.  92 
189,  548.  72 

$256,  597.  06 
238,  190.  83 
256,  533.  32 
305,  751.  50 
376,  494.  32 
289, 172.  03 
276,  688.  80 
275,  716.  53 
252,  694.  35 
236,  995.  27 
238,  051.  60 
220,  522.  69 

$4,  522. 55 
13,  231.  46 
2,  291.  35 
9,  570.  94 
i  87,  840.  98 
43,  800.  37 
8, 466.  33 
9,  090.  01 
25,  683.  88 

1  37, 898.  23 

2  86,  003.  68 

1  30,  973.  97 

$26,  397.  58 

26,  438.  02 

27,  210.  70 

28,  230.  89 

29,  010.  58 

20,  909.  28 
21, 190.  81 

21,  659.  76 
21,  514.  84 
21,413.  39 
20,  940.  76 
20, 866. 16 

$30, 920. 13 

39,  669.  48 

29,  502.  05 

37, 801.  83 
i  58,  830.  40 

64,  709.  65 

29,  657.  14 

30,  749.  77 

47, 198.  72 

1  16,  484.  84 
i  65,  062.  92 

1  10, 107.  81 

849,  503 

3,  097,  348.  33 

3,  223,  408.  30 

2  126,  059.  97 

285,  782.  77 

159,  722.  80 

81,  087 
95,  907 
88,  000 

249,  457.  91 
292, 362. 19 
270,  000.  00 

233,  538. 17 
231, 109.  73 
235,  000.  00 

15,  919.  74 
61,252.  46 
35,  000.  00 

20,811.46 
20, 811.46 
20,811.  46 

36,  731.  20 

82,  063.  92 

55, 811.  46 

1  Loss.  2  March  figures  estimated. 


There  was  taken  in  by  the  corporation  during  January,  February, 
and  March  the  sum  of  $149,577.85  in  excess  of  operating  expenses 
requiring  expenditure  of  funds. 

Of  this  amount  there  was  set  aside — - 


For  depreciation _ _ _ $80,  057. 15 

Reserve  for  future  repairs  (surplus) _  21,928.23 

Net  profits _ _ _  47,592.47 


Figures  for  March,  1925,  are  estimates  based  on  reports  from  New  Orleans  office,  and 
are  very  conservative.  Actual  results  for  February  exceeded  estimated  profits  by  ap¬ 
proximately  $12,500. 

Loss  in  May,  1924,  partly  due  to  adjustment  in  transferring  the  accounts  to  the  Inland 
Waterways  Corporation  and  largely  applicable  to  prior  periods. 

Losses  in  October,  November,  and  December  due  to  low  stage  of  river  and  floating  ice, 
which  seriously  delayed  deliveries  in  these  months.  This  happens  every  year  due  to 
the  fact  that  the  towboats  built  by  the  Railroad  Administration  draw  8  feet  3  inches 
and  are  unable  to  navigate  during  low  water.  This  corporation  will  remedy  that  by 
building  two  of  the  most  modern  light-draft  towboats,  with  Diesel  engines,  and  designed 
to  correct  all  errors  in  the  previous  boats. 

April  14,  1925. 

The  Director  of  the  Budget, 

Washington,  D.  C. 

My  Dear  General  Lord  :  In  compliance  with  your  telephonic  request  to  fur¬ 
nish  you  a  complete  statement  of  what  the  Inland  Waterways  Corporation  is 
doing,  the  following  is  submitted : 

The  current  liabilities  of  the  Inland  Waterways  Corporation  at  its  organiza¬ 
tion  June  1,  1924,  exceeded  its  current  assets  by  $588,114.67. 

The  current  assets  of  the  corporation  as  of  April  1,  1925,  exceed  the  current 
liabilities  by  $235,426.21. 

New  money  has  been  added  to  the  business  since  the  incorporation,  as  fol¬ 


lows  : 

Capital  stock  issued _ $1,  500,  000.  00 

Appropriations  used _  103,  276.  14 

Collections  on  loans  and  notes  receivable _  28,  610. 15 

Operating  profit  of  Mississippi-Warrior  service,  after  deducting 
accruals  for  depreciation  and  future  repairs,  which  required 
no  funds _  31,  322.  02 


Total  new  money _ _ _ _ _  1,  663,  208.  31 


27 


This  was  partially  expended  as  follows : 

To  cover  net  liabilities  assumed  by  the  corporation 

June  1,  1924 _ $588, 114.  67 

Property  and  equipment _ 810,  883.  44 

Expenses  of  Washington  office _  29,  283.  99 

Total  expenditures  from  new  money  obtained _  1,  427,  782. 10 


Working  capital  on  hand  April  1,  1925 _  235,  426.  21 

Since  April  1  we  have  received  a  remittance  from  the  New  Orleans  office  of 
$106,000.  That  office  is  allowed  $200,000  working  funds,  which  is  circulating 
capital  used  in  conducting  the  service,  and  represents  current  assets  in  excess 
of  liabilities.  By  the  use  of  this  fund  in  making  prompt  payments  and  getting 
discounts  we  saved,  since  November  1,  1924,  the  sum  of  $3,132. 


The  Washington  office  has  on  deposit — 

United  States  Treasury _ $35,  450 

-  Riggs  National  Bank  (checking  account,  drawing  2  per  cent) _  65,000 

Riggs  National  Bank  (savings  account,  drawing  3  per  cent) _  106,  000 


206,  450 


We  have  carried  in  this  period  912,082  tons  of  miscellaneous  cargo,  wTith  a 
total  revenue  of  $2,870,383.86. 

AVe  figure  a  saving  to  the  public  of  $1.30  per  ton  on  726,528  (the  Mississippi 
section),  which  is  $944,486.40,  and  a  saving  of  30  cents  per  ton  (the  Warrior 
section),  on  185,554,  which  is  $55,666.20,  or  a  total  of  $1,000,152.60. 

Very  respectfully, 


T.  Q.  Ashburn, 

Brigadier  General  United  States  Army, 

Chairman  and  Executive. 


Note. — These  figures  include  not  only  the  Mississippi  division,  but  also  the  Warrior 
division  and  the  expenses  of  the  Washington  office. 


Lest  there  be  any  of  my  readers  who  misapprehend  these  figures, 
attention  is  invited  to  the  fact  that  they  first  include  depreciation, 
and  then  deduct  it,  in  order  to  arirve  at  a  net  “  out  of  pocket  ”  loss. 
This  is  entirely  equitable,  and  you  may  take  either  set  you  desire, 
but  please  bear  in  mind  that  the  “maintenance,  repair,  and  new 
equipment  ”  figures  (included  in  the  gross  expenses)  are  very  much 
greater  than  the  depreciation,  and  that  the  fleet  is  daily  enhancing 
m  value,  not  depreciating.  (See  table,  p.  25.) 


MANDATES  OF  THE  LAW 


Now,  if  the  problem  were  only  to  continue  the  present  operations 
until  such  time  as  the  Government  could  dispose  of  its  holdings  at 
a  figure  approximating  the  value  of  its  investment,  I  think  it  is 
reasonably  safe  to  predict  that  such  a  consummation  could  be  at¬ 
tained  within  a  period  of  five  years;  but  note  that  this  bill  contains 
another  mandate ;  that  is,  it  not  only  becomes  the  duty  of  the  Secre¬ 
tary  of  War  to  foster  and  preserve  in  full  vigor  both  rail  and  water 
transportation  but  he  is  required  to  promote,  encourage,  and  develop 
water  transportation,  and  there  is  no  limitation  as  to  how  he  should 
do  it. 

CONDITIONS  VARY  ON  EACH  RIVER 


In  all  my  published  reports,  articles,  and  speeches,  the  fact  has 
been  emphasized  that  it  is  necessary  to  create  certain  conditions 
upon  interior  waterways  before  successful  common-carrier  opera¬ 
tion  can  follow;  and,  also,  that  when  these  conditions  are  created 


28 


upon  one  navigable  waterway  they  are  not  created  upon  any  other 
waterways  in  their  entirety. 

Speaking  before  the  Interstate  and  Foreign  Commerce  Com¬ 
mittee  of  the  House  of  Representatives  on  this  subject,  I  said : 

These  four  years  of  experimentation  (on  the  Mississippi  and  Warrior)  have 
not  been  lost.  Any  cost  to  the  Government  has  been  more  than  repaid  by  the 
freight  savings  accruing  to  the  public.  But  because  the  conditions  essential 
to  success  have  been  created  upon  the  lower  Mississippi,  does  not  mean  that 
these  conditions  have  been  created  upon  the  upper  Mississippi,  the  Ohio,  or 
the  Missouri.  But  what  you  have  done  is  this :  You  have  determined  that 
there  are  certain  essential  conditions  to  success;  you  know  what  these  condi¬ 
tions  are,  and  you  know  how  to  go  about  it  to  put  barge  lines  on  these  rivers 
and  to  make  them  a  success. 

Now,  it  is  highly  improbable  that  either  the  Ohio,  the  Missouri,  or 
the  upper  Mississippi  will  be  put  in  a  condition  to  handle  such 
tows  as  experience  has  found  to  be  profitable  on  the  lower  Mississippi 
for  at  least  five  years.  But  this  Inland  Waterways  Corporation 
can,  and  will,  encourage  private  operations  upon  the  streams  men¬ 
tioned,  and  all  others,  by  aiding  such  private  operators  to  create 
the  conditions  necessary  for  success  as  a  common  carrier.  And 
common  carriers  must  exist  if  the  public  at  large  is  to  get  the  benefit 
of  cheap  water  transportation. 

THE  VALUE  OF  THE  CORPORATION 

In  five  years  much  may  happen.  New  types  of  boats  designed  for 
use  upon  shallow  streams  may  prove  feasible  and  profitable;  and 
every  stream  emptying  into  the  great  national  artery  of  the  Missis¬ 
sippi  proper  may  become  a  feeder  to  the  great  barge  line,  increasing 
its  value,  necessitating  increases  in  its  capacity,  and  extending  its 
benefits  to  the  very  door  of  the  producer.  And  when  these  benefits 
have  been  extended  to  the  producer,  the  consumer  will  likewise  profit 
by  reduced  prices  of  manufactured  products. 

And  every  day  the  Inland  Waterways  Corporation  will  be  ex¬ 
tending  in  its  scope,  through  legal  interpretations,  decisions  of  the 
Interstate  Commerce  Commission,  and  precedents  regarding  fair 
divisions  of  revenue  for  joint  rail- water  traffic,  the  principle  that 
there  must  be  a  living  revenue  given  to  each  particular  carrier  in 
joint  rail  and  water  hauls;  and  the  vaster  more  important  principle 
to  the  public  and  private  operators,  that  coordination  of  effort,  co¬ 
operation  between  water,  rail,  and  highway  facilities  not  only  results 
in  cheaper  transportation  for  the  public,  but  creates  demands  for 
transportation  that  result  in  greater  and  continually  increasing  rev¬ 
enues  to  all  forms  of  transportation.  Fortunately  there  can  be  no 
more  war  to  the  death  between  rail  and  water  carriers,  once  the 
water  carrier  is  reestablished.  Many  of  the  conditions  that  allowed 
rail  interests  to  destroy  water  transportation  no  longer  exist,  and 
it  will  be  the  business  of  the  Inland  Waterways  Corporation  to  de¬ 
stroy  such  conditions  as  still  remain.  And,  backed  by  the  United 
States,  it  can  do  it. 

CHANGE  IN  SENTIMENT 

Unprejudiced  railroad  men,  especially  several  very  powerful 
offcials  whom  I  know  personally,  realize  the  changed  conditions, 
accept  them,  and  throw  the  weight  of  their  vast  influence  toward 


29 


cooperation,  with  powerful  effect.  He  who  runs  may  read  a  vast 
change  in  the  sentiment  regarding  water  and  rail  cooperation  within 
the  past  two  years;  but,  nevertheless,  while  war  to  the  death  is  no 
longer  possible  between  established  rail  and  water  carriers,  the  con¬ 
ditions  precedent  to  the  successful  reestablishment  of  common  car¬ 
riers  upon  our  inland  waterways  are  still  so  difficult  of  creation  as 
to  require  the  backing  of  the  United  States  Government. 

POWERS  OF  THE  CORPORATION 

The  act  authorized  to  be  appropriated  $5,000,000  to  purchase  stock 
in  the  corporation,  all  of  which  is  subscribed  for  by  the  United 
States;  and  which  can  be  obtained  in  such  sums  as  desired  from  time 
to  time.  In  other  wrords,  it  removes  the  restriction  accompanying 
an  ordinary  appropriation,  that  it  must  be  utilized  in  the  fiscal 
year  for  which  appropriated,  or  return  to  the  Treasury  of  the  United 
States.  It  thus  becomes  a  continuing  fund. 

The  corporation,  “in  addition  to  the  powers  specifically  granted, 
shall  have  such  powers  as  may  be  necessary  or  incidental  to  fulfill 
the  purpose  of  its  creation.” 

The  result  of  this  is  that  the  corporation  is  the  judge  of  how  its 
money  shall  be  spent,  and  such  expenditures  are  i*ot  subject  to  re¬ 
strictive  laws  or  technical  regulations  established  by  the  Comptroller 
General,  who,  before  the  passage  of  the  act,  had  the  absolute  power 
of  approval  or  disapproval  of  any  and  all  expenditures  made  by  this 
corporation,  even  with  the  approval  of  the  Secretary  of  War,  from 
appropriated  funds. 

The  bill  thus  accomplishes  the  purpose,  as  Congressman  Denison 
said  in  his  report,  “  of  getting  away  from  the  limitations  of  bureau¬ 
cratic  regulations  by  which  the  Secretary  of  War  is  hedged.”  Three 
million  dollars  was  made  immediately  available  by  this  present 
Congress. 

UPPER  MISSISSIPPI  RIVER 

By  the  transportation  act  of  1920,  it  was  only  under  the  contin¬ 
gency  that  the  so-called  “  Goltra  Fleet”  (designed  for  operation  on 
the  upper  Mississippi)  should  be  returned  to  the  United  States,  that 
operations  could  be  undertaken  on  the  upper  Mississippi.  This  act 
provides  a  mandate  that  the  corporation  shall  “  as  soon  as  there  is 
an  improved  channel  sufficient  to  permit  the  same,  initiate  the  water 
carriage  heretofore  authorized  by  law  upon  the  Mississippi  River 
above  St.  Louis.”  There  is  nothing  indefinite  about  that. 

CONTINUITY  OF  OPERATION 

No  facilities  shall  be  discontinued  until  authorized  by  Congress. 
The  same  provision  occurs  in  the  transportation  act,  where  the  Secre¬ 
tary  of  War  is  required  to  operate  in  such  a  manner  as  to  continue 
the  facilities  turned  over  to  his  control;  but  it  is  a  definite  reitera¬ 
tion  of  the  determination  of  Congress  to  give  this  corporation  a 
fair  show  to  make  a  success  by  the  announcement  that  its  service  will 
be  durable  and  dependable. 


30 


NEW  LINES 

“If  the  Secretary  of  War  deems  it  advisable  to  develop  and  op¬ 
erate  new  lines,  in  order  to  give  the  public  the  proper  service,  he 
shall  report  thereon  to  Congress.” 

IX 

ORGANIZATION 

Now  the  actrprovides  a  board  of  advisors,  none  of  whom  shall  re¬ 
ceive  any  salary  or  be  directly  interested  in  any  railroad.  The  testi¬ 
mony  advanced  before  the  committee  showed,  to  quote  their  report, 
“  There  are  many  very  able  and  successful  business  men  throughout 
the  entire  Mississippi  and  Ohio  and  Warrior  valleys  whose  services 
could  not  be  purchased  at  any  salary,  who  are  perfectly  willing  to 
serve  on  the  advisory  board  of  this  corporation  in  order  to  give  to  the 
Secretary  of  War  the  benefit  of  their  experience  and  their  business 
judgment  in  connection  with  the  operations  of  the  barge  line;  and 
the  development  of  new  lines.”  This  board  “  shall  consider  matters 
submitted  to  it  by  the  Secretary  of  War,  and  make  recommendations 
thereon,  and  from  time  to  time  advise  him  and  make  recommenda¬ 
tions,  in  respect  to  the  management  and  operation  of  existing  f acilites 
or  the  development  and  operation  of  new  lines.”  So  there  is  very  close 
cooperation  between  the  Secretary  of  War  and  the  board  of  advis¬ 
ors;  and  I  believe  that  when  the  board  and  the  Secretary  are  a  unit 
in  their  recommendations  to  Congress,  that  body  must  surely  accept 
their  combined  judgment  if  they  say  for  example,  “The  time  has 
come  to  initiate  a  barge  line,  a  common  carrier,  on  the  Ohio,  or  on 
the  Missouri,”  or  whatever  it  might  be. 

The  localities  and  communities  represented  by  this  board  will  feel 
that  their  local  interests  are  being  protected  at  the  same  time  that 
the  great  national  project  is  being  pushed  to  completion.  Of  neces¬ 
sity  the  board,  which  meets  only  on  call  of  the  Secretary  of  War, 
must  have  a  chairman  who  is  the  continuing  executive  representative 
of  the  Secretary  of  War.  The  necessity  of  this  is  perfectly  obvious. 
There  will  be  no  sudden  changes  of  policy  or  throwing  a  monkey 
wrench  in  the  buzz  saw  of  a  well-oiled  machine. 

A  continuing  policy  is  necessary  to  the  success  of  any  business 
organization,  and  there  must  be  some  executive  agent  to  see  that  such 
a  policy  is  carried  out. 

In  addition  to  the  $5,000,000  authorized  to  be  appropriated,  the 
act  also  provides  for  about  $1,500,000  additional  capital  from  various 
sources  and  gives  the  corporation  the  right  to  borrow  money.  This 
latter  provision  is  of  immense  importance. 

THE  POLICY  PRESENTED  TO  CONGRESS 

The  Secretary  of  War  wisely  presented  to  Congress  a  concrete 
program  which  they  could  accept  or  reject.  It  had  before  them  all 
information  regarding  the  following  points : 

(a)  The  inherent  difficulties  of  governmental  operation. 


31 


(b)  The  necessity  of  governmental  operation  as  a  pioneer  demon¬ 
strator. 

( c )  The  necessity  of  Congress  providing  some  means  which  will 
allow  the  Secretary  of  War,  its  mandatory,  to  do  the  things  he  would 
ordinarily  do  as  the  head  of  a  great  private  transportation  agency. 

(d)  The  necessity  of  providing  the  Secretary  of  War  with  suffi¬ 
cient  capital  to  overcome  the  conditions  which  militate  against  the 
success  of  the  governmental  demonstration. 

CONGRESSIONAL  ACTION 

And  I  think  that  Congress  in  passing  this  bill  did  do  precisely  the 
things  essential  to  be  done  in  the  creation  of  a  corporation  controlled 
by  the  Secretary  of  War;  by  investing  him  with  the  necessary  powers 
and  funds  to  demonstrate  successfully  not  only  the  inherent  possibil¬ 
ities  of  cheap,  profitable,  and  dependable  transportation  by  water, 
not  only  that  savings  will  accrue  to  the  public,  not  only  that  our 
policy  of  improving  our  internal  waterways  is  a  good  policy,  but  that 
this  demonstration  will  soon  result  in  the  utilization  of  our  navigable 
streams  by  private  capital  operating  common-carrier  facilities;  thus 
freely  offering  to  all  population,  rich  and  poor,  the  benefits  to  be 
derived  from  cheaper  transportation. 

COOPERATION  NECESSARY 

In  order  to  hasten  the  creation  of  successful  common  carriers  upon 
our  navigable  streams,  there  must  be,  on  the  one  hand,  an  abandon¬ 
ment  of  the  attitude  that  the  development  of  our  waterways  for 
navigation  is  purely  for  the  purpose  of  reducing  rail  rates  by  actual, 
or  potential,  competition.  On  the  other  hand  there  must  be  an  aban¬ 
donment  of  the  policy  of  active  destruction  of  water  carriers  by  rail¬ 
ways,  which  may  take  one  of  many  forms,  but  which  seems  to  have 
centralized  in  a  battering-ram  against  the  fundamental  principle  that 
water  transportation  is  inherently  cheaper  than  any  other  form. 

MANIPULATED  FIGURES 

Because  water  transportation  has  not  come  back  over  night,  be¬ 
cause  the  essential  condtions  for  its  rehabilitation  have  not  yet  been 
completely  developed,  regardless  of  the  fact  that  with  the  exception 
of  two  and  a  half  million  dollars  (or  2  mills  per  capita,  appropriated 
in  three  years),  all  the  money  invested  by  the  United  States  in  this 
demonstration  was  money  spent  as  a  war  measure,  and  as  such  should 
be  wiped  off  as  any  other  war  expenditure,  I  have  seen  it  stated  that 
it  actually  costs  the  Government  $2.68  net,  a  ton,  to  carry  anything 
on  the  Mississippi;  and  $4.18  a  ton  net,  on  the  Warrior.  As  the  total 
amount  of  money  spent  on  the  operations  of  the  Mississippi -Warrior 
since  its  inception  in  1918  is  only  a  little  over  $3,000,000  more  than  it 
took  in — and  this  includes  war  operations — and  as,  during  that  time, 
the  service  has  carried  a  little  over  four  and  a  half  million  tons  at 
a  conservative  freight  saving  of  $6,000,000, 1  can  not  get  these  figures 
our  opponents  claim  it  costs.  Nevertheless,  it  is  good  propaganda 
against  us,  because  few  people  know  the  facts,  or  care  to  investigate. 


* 


32 


THE  TRUTH 

t 

And  be  not  misled  by  figures  that  are  manipulated  to  show  tre¬ 
mendous  losses.  Examine  the  official  table  printed  above.  The  re-  ^ 

suits  speak  for  themselves.  Nine  months  of  every  year,  when  the 
channel  is  there,  the  line  pays  well,  and  all  that  is  necessary  to  make 
it  pay  12  months  of  the  year  is  two  light-draft  towboats,  which  this 
corporation  will  construct,  and  additional  barges.  If  the  equipment 
were  there  this  barge  line  could  treble  its  total  yearly  carriage  and 
cut  its  cost  per  ton  accordingly.  If  it  only  had  one-half  its  present 
equipment,  and  had  only  carried  one-half  as  much,  the  figures  issued 
as  propaganda  against  waterway  transportation  would  be  doubled. 

We  will  merely  touch  upon  the  Warrior  to  say  that  the  losses 
thereon  have  been  reduced  from  $50,000  a  month  to  $8,000  a  month, 
and  we  seem  in  a  fair  way  to  put  the  Warrior  system  on  a  paying 
basis  soon. 


ADDITIONAL  COPIES 

OF  THIS  PUBLICATION  MAY  BE  PROCURED  FROM 
THE  SUPERINTENDENT  OF  DOCUMENTS 
GOVERNMENT  PRINTING  OFFICE 
WASHINGTON,  D.  C. 

AT 

10  CENTS  PER  COPY 
V 


. 


mm 


